Correlation Between ASML HOLDING and PULSION Medical

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

By analyzing existing cross correlation between ASML HOLDING NY and PULSION Medical Systems, you can compare the effects of market volatilities on ASML HOLDING and PULSION Medical 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 PULSION Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASML HOLDING and PULSION Medical.

Diversification Opportunities for ASML HOLDING and PULSION Medical

-0.14

Correlation Coefficient

ASML HOLDING  PULSION Medical

Good diversification

The 3 months correlation between ASML and PULSION is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding ASML HOLDING NY and PULSION Medical Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PULSION Medical Systems 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 NY are associated (or correlated) with PULSION Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PULSION Medical Systems has no effect on the direction of ASML HOLDING i.e., ASML HOLDING and PULSION Medical go up and down completely randomly.

Pair Corralation between ASML HOLDING and PULSION Medical

Assuming the 90 days trading horizon ASML HOLDING NY is expected to generate 2.61 times more return on investment than PULSION Medical. However, ASML HOLDING is 2.61 times more volatile than PULSION Medical Systems. It trades about 0.09 of its potential returns per unit of risk. PULSION Medical Systems is currently generating about 0.03 per unit of risk. If you would invest  66,234  in ASML HOLDING NY on October 24, 2024 and sell it today you would earn a total of  6,966  from holding ASML HOLDING NY or generate 10.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

ASML HOLDING NY  vs.  PULSION Medical Systems

ASML HOLDING NY

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ASML HOLDING NY are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady primary indicators, ASML HOLDING may actually be approaching a critical reversion point that can send shares even higher in February 2025.

PULSION Medical Systems

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PULSION Medical Systems are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, PULSION Medical is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with ASML HOLDING and PULSION Medical

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

The idea behind ASML HOLDING NY and PULSION Medical Systems 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.