Correlation Between Photronics and Axcelis Technologies

Can any of the company-specific risk be diversified away by investing in both Photronics 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 Photronics and Axcelis Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Photronics and Axcelis Technologies, you can compare the effects of market volatilities on Photronics 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 Photronics with a short position of Axcelis Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Photronics and Axcelis Technologies.

Diversification Opportunities for Photronics and Axcelis Technologies

0.93

Correlation Coefficient

Photronics  Axcelis Technologies

Almost no diversification

The 3 months correlation between Photronics and Axcelis is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Photronics and Axcelis Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axcelis Technologies and Photronics 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 Photronics 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 Photronics i.e., Photronics and Axcelis Technologies go up and down completely randomly.

Pair Corralation between Photronics and Axcelis Technologies

Given the investment horizon of 90 days Photronics is expected to generate 0.6 times more return on investment than Axcelis Technologies. However, Photronics is 1.66 times less risky than Axcelis Technologies. It trades about -0.11 of its potential returns per unit of risk. Axcelis Technologies is currently generating about -0.17 per unit of risk. If you would invest  2,352  in Photronics on December 30, 2024 and sell it today you would lose (292.00) from holding Photronics or give up 12.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Photronics  vs.  Axcelis Technologies

Photronics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Photronics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

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 Photronics and Axcelis Technologies

The main advantage of trading using opposite Photronics and Axcelis Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Photronics 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 Photronics 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.