Correlation Between ASML Holding and Oceantech Acquisitions

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

Diversification Opportunities for ASML Holding and Oceantech Acquisitions

-0.36

Correlation Coefficient

ASML Holding  Oceantech Acquisitions

Very good diversification

The 3 months correlation between ASML and Oceantech is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and Oceantech Acquisitions I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oceantech Acquisitions 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 Oceantech Acquisitions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oceantech Acquisitions has no effect on the direction of ASML Holding i.e., ASML Holding and Oceantech Acquisitions go up and down completely randomly.

Pair Corralation between ASML Holding and Oceantech Acquisitions

Given the investment horizon of 90 days ASML Holding NV is expected to generate 3.99 times more return on investment than Oceantech Acquisitions. However, ASML Holding is 3.99 times more volatile than Oceantech Acquisitions I. It trades about 0.03 of its potential returns per unit of risk. Oceantech Acquisitions I is currently generating about 0.03 per unit of risk. If you would invest  61,909  in ASML Holding NV on October 10, 2024 and sell it today you would earn a total of  13,849  from holding ASML Holding NV or generate 22.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	25.86%
Values	Daily Returns

ASML Holding NV  vs.  Oceantech Acquisitions I

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.

Oceantech Acquisitions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oceantech Acquisitions I has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Oceantech Acquisitions is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with ASML Holding and Oceantech Acquisitions

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

The idea behind ASML Holding NV and Oceantech Acquisitions I 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.