Correlation Between ASML Holding and AW Revenue

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

Diversification Opportunities for ASML Holding and AW Revenue

0.0

Correlation Coefficient

ASML Holding  AW Revenue

Pay attention - limited upside

The 3 months correlation between ASML and AWRRF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and AW Revenue Royalties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AW Revenue Royalties 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 AW Revenue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AW Revenue Royalties has no effect on the direction of ASML Holding i.e., ASML Holding and AW Revenue go up and down completely randomly.

Pair Corralation between ASML Holding and AW Revenue

If you would invest  66,947  in ASML Holding NV on October 9, 2024 and sell it today you would earn a total of  9,904  from holding ASML Holding NV or generate 14.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	2.5%
Values	Daily Returns

ASML Holding NV  vs.  AW Revenue Royalties

ASML Holding NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ASML Holding NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's primary indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

AW Revenue Royalties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AW Revenue Royalties has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, AW Revenue is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with ASML Holding and AW Revenue

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

The idea behind ASML Holding NV and AW Revenue Royalties 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.