Correlation Between EAST SIDE and ASML Holding

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

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

Diversification Opportunities for EAST SIDE and ASML Holding

0.09

Correlation Coefficient

EAST SIDE  ASML Holding

Significant diversification

The 3 months correlation between EAST and ASML is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding EAST SIDE GAMES 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 EAST SIDE 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 EAST SIDE GAMES 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 EAST SIDE i.e., EAST SIDE and ASML Holding go up and down completely randomly.

Pair Corralation between EAST SIDE and ASML Holding

Assuming the 90 days horizon EAST SIDE GAMES is expected to under-perform the ASML Holding. In addition to that, EAST SIDE is 4.94 times more volatile than ASML Holding NV. It trades about -0.07 of its total potential returns per unit of risk. ASML Holding NV is currently generating about 0.2 per unit of volatility. If you would invest  67,300  in ASML Holding NV on October 7, 2024 and sell it today you would earn a total of  2,320  from holding ASML Holding NV or generate 3.45% return on investment over 90 days.

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

EAST SIDE GAMES  vs.  ASML Holding NV

EAST SIDE GAMES

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EAST SIDE GAMES has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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

Pair Trading with EAST SIDE and ASML Holding

The main advantage of trading using opposite EAST SIDE and ASML Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EAST SIDE 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 EAST SIDE GAMES 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.

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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.