Correlation Between ASML Holding and Amtech Systems

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

Diversification Opportunities for ASML Holding and Amtech Systems

0.33

Correlation Coefficient

ASML Holding  Amtech Systems

Weak diversification

The 3 months correlation between ASML and Amtech is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and Amtech Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amtech Systems 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 Amtech Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amtech Systems has no effect on the direction of ASML Holding i.e., ASML Holding and Amtech Systems go up and down completely randomly.

Pair Corralation between ASML Holding and Amtech Systems

Assuming the 90 days horizon ASML Holding NV is expected to generate 0.75 times more return on investment than Amtech Systems. However, ASML Holding NV is 1.33 times less risky than Amtech Systems. It trades about 0.27 of its potential returns per unit of risk. Amtech Systems is currently generating about -0.1 per unit of risk. If you would invest  70,331  in ASML Holding NV on October 8, 2024 and sell it today you would earn a total of  6,569  from holding ASML Holding NV or generate 9.34% return on investment over 90 days.

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

ASML Holding NV  vs.  Amtech Systems

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 nearly stable essential indicators, ASML Holding is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Amtech Systems

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with ASML Holding and Amtech Systems

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

The idea behind ASML Holding NV and Amtech Systems 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .