Correlation Between Axcelis Technologies and Indie Semiconductor

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

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

Diversification Opportunities for Axcelis Technologies and Indie Semiconductor

-0.54

Correlation Coefficient

Axcelis Technologies  Indie Semiconductor

Excellent diversification

The 3 months correlation between Axcelis and Indie is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Axcelis Technologies and indie Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on indie Semiconductor and Axcelis Technologies 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 Axcelis Technologies are associated (or correlated) with Indie Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of indie Semiconductor has no effect on the direction of Axcelis Technologies i.e., Axcelis Technologies and Indie Semiconductor go up and down completely randomly.

Pair Corralation between Axcelis Technologies and Indie Semiconductor

Given the investment horizon of 90 days Axcelis Technologies is expected to under-perform the Indie Semiconductor. But the stock apears to be less risky and, when comparing its historical volatility, Axcelis Technologies is 3.43 times less risky than Indie Semiconductor. The stock trades about -0.17 of its potential returns per unit of risk. The indie Semiconductor is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  378.00  in indie Semiconductor on September 2, 2024 and sell it today you would earn a total of  145.00  from holding indie Semiconductor or generate 38.36% return on investment over 90 days.

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

Axcelis Technologies  vs.  indie Semiconductor

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 inconsistent performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

indie Semiconductor

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in indie Semiconductor are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain fundamental indicators, Indie Semiconductor demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Axcelis Technologies and Indie Semiconductor

The main advantage of trading using opposite Axcelis Technologies and Indie Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axcelis Technologies position performs unexpectedly, Indie Semiconductor 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 Indie Semiconductor will offset losses from the drop in Indie Semiconductor's long position.

The idea behind Axcelis Technologies and indie Semiconductor 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.