Correlation Between ASML Holding and Cohen Circle

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

Diversification Opportunities for ASML Holding and Cohen Circle

0.05

Correlation Coefficient

ASML Holding  Cohen Circle

Significant diversification

The 3 months correlation between ASML and Cohen is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and Cohen Circle Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Circle Acquisition 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 Cohen Circle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cohen Circle Acquisition has no effect on the direction of ASML Holding i.e., ASML Holding and Cohen Circle go up and down completely randomly.

Pair Corralation between ASML Holding and Cohen Circle

Given the investment horizon of 90 days ASML Holding is expected to generate 5.2 times less return on investment than Cohen Circle. In addition to that, ASML Holding is 1.98 times more volatile than Cohen Circle Acquisition. It trades about 0.02 of its total potential returns per unit of risk. Cohen Circle Acquisition is currently generating about 0.25 per unit of volatility. If you would invest  1,009  in Cohen Circle Acquisition on December 18, 2024 and sell it today you would earn a total of  198.00  from holding Cohen Circle Acquisition or generate 19.62% return on investment over 90 days.

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

ASML Holding NV  vs.  Cohen Circle Acquisition

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. Despite quite persistent primary indicators, ASML Holding is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Cohen Circle Acquisition

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cohen Circle Acquisition are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Cohen Circle unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ASML Holding and Cohen Circle

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

The idea behind ASML Holding NV and Cohen Circle Acquisition 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.