Correlation Between Bridger Aerospace and ASML Holding

Can any of the company-specific risk be diversified away by investing in both Bridger Aerospace and ASML Holding 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 Bridger Aerospace and ASML Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bridger Aerospace Group and ASML Holding NV, you can compare the effects of market volatilities on Bridger Aerospace and ASML Holding 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 Bridger Aerospace with a short position of ASML Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridger Aerospace and ASML Holding.

Diversification Opportunities for Bridger Aerospace and ASML Holding

-0.62

Correlation Coefficient

Bridger Aerospace  ASML Holding

Excellent diversification

The 3 months correlation between Bridger and ASML is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Bridger Aerospace Group and ASML Holding NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASML Holding NV and Bridger Aerospace 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 Bridger Aerospace Group are associated (or correlated) with ASML Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASML Holding NV has no effect on the direction of Bridger Aerospace i.e., Bridger Aerospace and ASML Holding go up and down completely randomly.

Pair Corralation between Bridger Aerospace and ASML Holding

Given the investment horizon of 90 days Bridger Aerospace Group is expected to generate 2.81 times more return on investment than ASML Holding. However, Bridger Aerospace is 2.81 times more volatile than ASML Holding NV. It trades about 0.04 of its potential returns per unit of risk. ASML Holding NV is currently generating about -0.13 per unit of risk. If you would invest  269.00  in Bridger Aerospace Group on August 30, 2024 and sell it today you would earn a total of  3.00  from holding Bridger Aerospace Group or generate 1.12% return on investment over 90 days.

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

Bridger Aerospace Group  vs.  ASML Holding NV

Bridger Aerospace

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bridger Aerospace Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent technical and fundamental indicators, Bridger Aerospace reported solid returns over the last few months and may actually be approaching a breakup point.

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 uncertain performance in the last few months, the Stock's primary indicators remain quite persistent which may send shares a bit higher in December 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Bridger Aerospace and ASML Holding

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

The idea behind Bridger Aerospace Group and ASML Holding NV 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 Stocks Directory module to find actively traded stocks across global markets.