Correlation Between SIVERS SEMICONDUCTORS and ASML Holding

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

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

Diversification Opportunities for SIVERS SEMICONDUCTORS and ASML Holding

0.5

Correlation Coefficient

SIVERS SEMICONDUCTORS  ASML Holding

Very weak diversification

The 3 months correlation between SIVERS and ASML is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding SIVERS SEMICONDUCTORS AB and ASML Holding NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASML Holding NV and SIVERS SEMICONDUCTORS 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 SIVERS SEMICONDUCTORS AB are associated (or correlated) with ASML Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASML Holding NV has no effect on the direction of SIVERS SEMICONDUCTORS i.e., SIVERS SEMICONDUCTORS and ASML Holding go up and down completely randomly.

Pair Corralation between SIVERS SEMICONDUCTORS and ASML Holding

Assuming the 90 days horizon SIVERS SEMICONDUCTORS AB is expected to generate 3.52 times more return on investment than ASML Holding. However, SIVERS SEMICONDUCTORS is 3.52 times more volatile than ASML Holding NV. It trades about 0.18 of its potential returns per unit of risk. ASML Holding NV is currently generating about 0.03 per unit of risk. If you would invest  21.00  in SIVERS SEMICONDUCTORS AB on December 2, 2024 and sell it today you would earn a total of  22.00  from holding SIVERS SEMICONDUCTORS AB or generate 104.76% return on investment over 90 days.

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

SIVERS SEMICONDUCTORS AB  vs.  ASML Holding NV

SIVERS SEMICONDUCTORS

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SIVERS SEMICONDUCTORS AB are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, SIVERS SEMICONDUCTORS reported solid returns over the last few months and may actually be approaching a breakup point.

ASML Holding NV

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ASML Holding NV are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, ASML Holding is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with SIVERS SEMICONDUCTORS and ASML Holding

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

The idea behind SIVERS SEMICONDUCTORS AB and ASML Holding NV 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.