Correlation Between ASML Holding and Cadeler AS

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

Diversification Opportunities for ASML Holding and Cadeler AS

-0.08

Correlation Coefficient

ASML Holding  Cadeler AS

Good diversification

The 3 months correlation between ASML and Cadeler is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and Cadeler AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cadeler AS 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 Cadeler AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cadeler AS has no effect on the direction of ASML Holding i.e., ASML Holding and Cadeler AS go up and down completely randomly.

Pair Corralation between ASML Holding and Cadeler AS

Given the investment horizon of 90 days ASML Holding NV is expected to generate 1.1 times more return on investment than Cadeler AS. However, ASML Holding is 1.1 times more volatile than Cadeler AS. It trades about 0.04 of its potential returns per unit of risk. Cadeler AS is currently generating about -0.06 per unit of risk. If you would invest  70,418  in ASML Holding NV on December 20, 2024 and sell it today you would earn a total of  3,073  from holding ASML Holding NV or generate 4.36% return on investment over 90 days.

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

ASML Holding NV  vs.  Cadeler AS

ASML Holding NV

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ASML Holding NV are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain primary indicators, ASML Holding may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Cadeler AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cadeler AS has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest fragile performance, the Stock's essential indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with ASML Holding and Cadeler AS

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

The idea behind ASML Holding NV and Cadeler AS 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.