Correlation Between ASML Holding and Aalberts Industries

Can any of the company-specific risk be diversified away by investing in both ASML Holding and Aalberts Industries 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 Aalberts Industries 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 Aalberts Industries NV, you can compare the effects of market volatilities on ASML Holding and Aalberts Industries 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 Aalberts Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASML Holding and Aalberts Industries.

Diversification Opportunities for ASML Holding and Aalberts Industries

-0.13

Correlation Coefficient

ASML Holding  Aalberts Industries

Good diversification

The 3 months correlation between ASML and Aalberts is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and Aalberts Industries NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aalberts Industries 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 Aalberts Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aalberts Industries has no effect on the direction of ASML Holding i.e., ASML Holding and Aalberts Industries go up and down completely randomly.

Pair Corralation between ASML Holding and Aalberts Industries

Assuming the 90 days trading horizon ASML Holding NV is expected to generate 1.45 times more return on investment than Aalberts Industries. However, ASML Holding is 1.45 times more volatile than Aalberts Industries NV. It trades about -0.02 of its potential returns per unit of risk. Aalberts Industries NV is currently generating about -0.05 per unit of risk. If you would invest  87,706  in ASML Holding NV on December 4, 2024 and sell it today you would lose (18,676) from holding ASML Holding NV or give up 21.29% of portfolio value over 90 days.

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

ASML Holding NV  vs.  Aalberts Industries NV

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 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, ASML Holding is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Aalberts Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aalberts Industries NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with ASML Holding and Aalberts Industries

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

The idea behind ASML Holding NV and Aalberts Industries 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.

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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..