Correlation Between Axcelis Technologies and Tencent Music

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

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

Diversification Opportunities for Axcelis Technologies and Tencent Music

0.88

Correlation Coefficient

Axcelis Technologies  Tencent Music

Very poor diversification

The 3 months correlation between Axcelis and Tencent is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Axcelis Technologies and Tencent Music Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tencent Music Entert 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 Tencent Music. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tencent Music Entert has no effect on the direction of Axcelis Technologies i.e., Axcelis Technologies and Tencent Music go up and down completely randomly.

Pair Corralation between Axcelis Technologies and Tencent Music

Assuming the 90 days trading horizon Axcelis Technologies is expected to generate 1.01 times less return on investment than Tencent Music. In addition to that, Axcelis Technologies is 1.13 times more volatile than Tencent Music Entertainment. It trades about 0.23 of its total potential returns per unit of risk. Tencent Music Entertainment is currently generating about 0.27 per unit of volatility. If you would invest  1,150  in Tencent Music Entertainment on April 23, 2025 and sell it today you would earn a total of  680.00  from holding Tencent Music Entertainment or generate 59.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

Axcelis Technologies  vs.  Tencent Music Entertainment

Axcelis Technologies

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Axcelis Technologies are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Axcelis Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Tencent Music Entert

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tencent Music Entertainment are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Tencent Music reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Axcelis Technologies and Tencent Music

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

The idea behind Axcelis Technologies and Tencent Music Entertainment 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.