Correlation Between Trio Tech and Axcelis Technologies

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

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

Diversification Opportunities for Trio Tech and Axcelis Technologies

0.03

Correlation Coefficient

Trio Tech  Axcelis Technologies

Significant diversification

The 3 months correlation between Trio and Axcelis is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Trio Tech International and Axcelis Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axcelis Technologies and Trio Tech 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 Trio Tech International 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 Trio Tech i.e., Trio Tech and Axcelis Technologies go up and down completely randomly.

Pair Corralation between Trio Tech and Axcelis Technologies

Considering the 90-day investment horizon Trio Tech International is expected to under-perform the Axcelis Technologies. In addition to that, Trio Tech is 1.17 times more volatile than Axcelis Technologies. It trades about -0.32 of its total potential returns per unit of risk. Axcelis Technologies is currently generating about -0.2 per unit of volatility. If you would invest  7,623  in Axcelis Technologies on October 5, 2024 and sell it today you would lose (603.00) from holding Axcelis Technologies or give up 7.91% of portfolio value over 90 days.

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

Trio Tech International  vs.  Axcelis Technologies

Trio Tech International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Trio Tech International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Trio Tech is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Axcelis Technologies

Risk-Adjusted Performance

0 of 100

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 February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Trio Tech and Axcelis Technologies

The main advantage of trading using opposite Trio Tech and Axcelis Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trio Tech 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 Trio Tech International 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.

Check out your portfolio center.

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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.