Correlation Between ASML Holding and Just Eat

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

Diversification Opportunities for ASML Holding and Just Eat

-0.67

Correlation Coefficient

ASML Holding  Just Eat

Excellent diversification

The 3 months correlation between ASML and Just is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and Just Eat Takeaway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Just Eat Takeaway 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 Just Eat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Just Eat Takeaway has no effect on the direction of ASML Holding i.e., ASML Holding and Just Eat go up and down completely randomly.

Pair Corralation between ASML Holding and Just Eat

Assuming the 90 days trading horizon ASML Holding NV is expected to under-perform the Just Eat. But the stock apears to be less risky and, when comparing its historical volatility, ASML Holding NV is 2.82 times less risky than Just Eat. The stock trades about -0.03 of its potential returns per unit of risk. The Just Eat Takeaway is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  1,327  in Just Eat Takeaway on December 29, 2024 and sell it today you would earn a total of  621.00  from holding Just Eat Takeaway or generate 46.8% return on investment over 90 days.

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

ASML Holding NV  vs.  Just Eat Takeaway

ASML Holding NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days ASML Holding NV has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Just Eat Takeaway

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Just Eat Takeaway are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Just Eat unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ASML Holding and Just Eat

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

The idea behind ASML Holding NV and Just Eat Takeaway 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.