Correlation Between ASML Holding and Cyberlux Corp

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

Diversification Opportunities for ASML Holding and Cyberlux Corp

0.12

Correlation Coefficient

ASML Holding  Cyberlux Corp

Average diversification

The 3 months correlation between ASML and Cyberlux is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and Cyberlux Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cyberlux Corp 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 Cyberlux Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cyberlux Corp has no effect on the direction of ASML Holding i.e., ASML Holding and Cyberlux Corp go up and down completely randomly.

Pair Corralation between ASML Holding and Cyberlux Corp

Given the investment horizon of 90 days ASML Holding NV is expected to generate 0.29 times more return on investment than Cyberlux Corp. However, ASML Holding NV is 3.41 times less risky than Cyberlux Corp. It trades about 0.04 of its potential returns per unit of risk. Cyberlux Corp 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 Together
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

ASML Holding NV  vs.  Cyberlux Corp

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.

Cyberlux Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cyberlux Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with ASML Holding and Cyberlux Corp

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

The idea behind ASML Holding NV and Cyberlux Corp 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.