Correlation Between ASML Holding and 04685A3D1

Can any of the company-specific risk be diversified away by investing in both ASML Holding and 04685A3D1 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 04685A3D1 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 ATH 173 02 OCT 26, you can compare the effects of market volatilities on ASML Holding and 04685A3D1 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 04685A3D1. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASML Holding and 04685A3D1.

Diversification Opportunities for ASML Holding and 04685A3D1

-0.18

Correlation Coefficient

ASML Holding  04685A3D1

Good diversification

The 3 months correlation between ASML and 04685A3D1 is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and ATH 173 02 OCT 26 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATH 173 02 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 04685A3D1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATH 173 02 has no effect on the direction of ASML Holding i.e., ASML Holding and 04685A3D1 go up and down completely randomly.

Pair Corralation between ASML Holding and 04685A3D1

Given the investment horizon of 90 days ASML Holding NV is expected to generate 0.38 times more return on investment than 04685A3D1. However, ASML Holding NV is 2.66 times less risky than 04685A3D1. It trades about 0.13 of its potential returns per unit of risk. ATH 173 02 OCT 26 is currently generating about 0.0 per unit of risk. If you would invest  70,527  in ASML Holding NV on October 11, 2024 and sell it today you would earn a total of  3,871  from holding ASML Holding NV or generate 5.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	42.86%
Values	Daily Returns

ASML Holding NV  vs.  ATH 173 02 OCT 26

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.

ATH 173 02

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ATH 173 02 OCT 26 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 04685A3D1 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ASML Holding and 04685A3D1

The main advantage of trading using opposite ASML Holding and 04685A3D1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASML Holding position performs unexpectedly, 04685A3D1 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 04685A3D1 will offset losses from the drop in 04685A3D1's long position.

The idea behind ASML Holding NV and ATH 173 02 OCT 26 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.