Correlation Between Lam Research and Axcelis Technologies

Can any of the company-specific risk be diversified away by investing in both Lam Research and Axcelis Technologies at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Lam Research and Axcelis Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lam Research Corp and Axcelis Technologies, you can compare the effects of market volatilities on Lam Research and Axcelis Technologies and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Lam Research with a short position of Axcelis Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lam Research and Axcelis Technologies.

Diversification Opportunities for Lam Research and Axcelis Technologies

-0.11

Correlation Coefficient

Lam Research  Axcelis Technologies

Good diversification

The 3 months correlation between Lam and Axcelis is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Lam Research Corp and Axcelis Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axcelis Technologies and Lam Research is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Lam Research Corp are associated (or correlated) with Axcelis Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axcelis Technologies has no effect on the direction of Lam Research i.e., Lam Research and Axcelis Technologies go up and down completely randomly.

Pair Corralation between Lam Research and Axcelis Technologies

Given the investment horizon of 90 days Lam Research Corp is expected to generate 0.93 times more return on investment than Axcelis Technologies. However, Lam Research Corp is 1.07 times less risky than Axcelis Technologies. It trades about 0.04 of its potential returns per unit of risk. Axcelis Technologies is currently generating about -0.14 per unit of risk. If you would invest  7,193  in Lam Research Corp on December 28, 2024 and sell it today you would earn a total of  288.00  from holding Lam Research Corp or generate 4.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Lam Research Corp  vs.  Axcelis Technologies

Lam Research Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lam Research Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting fundamental indicators, Lam Research may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Axcelis Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Axcelis Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Lam Research and Axcelis Technologies

The main advantage of trading using opposite Lam Research and Axcelis Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lam Research position performs unexpectedly, Axcelis Technologies can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Axcelis Technologies will offset losses from the drop in Axcelis Technologies' long position.

The idea behind Lam Research Corp and Axcelis Technologies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.