Correlation Between Cohen Circle and ASML Holding

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

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

Diversification Opportunities for Cohen Circle and ASML Holding

0.05

Correlation Coefficient

Cohen Circle  ASML Holding

Significant diversification

The 3 months correlation between Cohen and ASML is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Cohen Circle Acquisition 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 Cohen Circle 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 Cohen Circle Acquisition 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 Cohen Circle i.e., Cohen Circle and ASML Holding go up and down completely randomly.

Pair Corralation between Cohen Circle and ASML Holding

Assuming the 90 days horizon Cohen Circle Acquisition is expected to generate 0.51 times more return on investment than ASML Holding. However, Cohen Circle Acquisition is 1.98 times less risky than ASML Holding. It trades about 0.25 of its potential returns per unit of risk. ASML Holding NV is currently generating about 0.02 per unit of risk. If you would invest  1,009  in Cohen Circle Acquisition on December 18, 2024 and sell it today you would earn a total of  198.00  from holding Cohen Circle Acquisition or generate 19.62% return on investment over 90 days.

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

Cohen Circle Acquisition  vs.  ASML Holding NV

Cohen Circle Acquisition

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cohen Circle Acquisition are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Cohen Circle unveiled solid returns over the last few months and may actually be approaching a breakup point.

ASML Holding NV

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ASML Holding NV are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent primary indicators, ASML Holding is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Cohen Circle and ASML Holding

The main advantage of trading using opposite Cohen Circle and ASML Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cohen Circle 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 Cohen Circle Acquisition 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.