Correlation Between ASML Holding and Axcelis Technologies

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

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

Diversification Opportunities for ASML Holding and Axcelis Technologies

0.9

Correlation Coefficient

ASML Holding  Axcelis Technologies

Almost no diversification

The 3 months correlation between ASML and Axcelis is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and Axcelis Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axcelis Technologies and ASML Holding 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 ASML Holding NV 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 ASML Holding i.e., ASML Holding and Axcelis Technologies go up and down completely randomly.

Pair Corralation between ASML Holding and Axcelis Technologies

Given the investment horizon of 90 days ASML Holding NV is expected to generate 1.19 times more return on investment than Axcelis Technologies. However, ASML Holding is 1.19 times more volatile than Axcelis Technologies. It trades about -0.1 of its potential returns per unit of risk. Axcelis Technologies is currently generating about -0.18 per unit of risk. If you would invest  84,343  in ASML Holding NV on August 31, 2024 and sell it today you would lose (17,295) from holding ASML Holding NV or give up 20.51% of portfolio value over 90 days.

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

ASML Holding NV  vs.  Axcelis Technologies

ASML Holding NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ASML Holding NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's primary indicators remain quite persistent which may send shares a bit higher in December 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional 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 unsteady performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with ASML Holding and Axcelis Technologies

The main advantage of trading using opposite ASML Holding and Axcelis Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASML Holding 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 ASML Holding NV 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.