Correlation Between 04685A3D1 and ASML Holding

Can any of the company-specific risk be diversified away by investing in both 04685A3D1 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 04685A3D1 and ASML Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ATH 173 02 OCT 26 and ASML Holding NV, you can compare the effects of market volatilities on 04685A3D1 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 04685A3D1 with a short position of ASML Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of 04685A3D1 and ASML Holding.

Diversification Opportunities for 04685A3D1 and ASML Holding

-0.38

Correlation Coefficient

04685A3D1  ASML Holding

Very good diversification

The 3 months correlation between 04685A3D1 and ASML is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding ATH 173 02 OCT 26 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 04685A3D1 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 ATH 173 02 OCT 26 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 04685A3D1 i.e., 04685A3D1 and ASML Holding go up and down completely randomly.

Pair Corralation between 04685A3D1 and ASML Holding

Assuming the 90 days trading horizon ATH 173 02 OCT 26 is expected to under-perform the ASML Holding. In addition to that, 04685A3D1 is 1.93 times more volatile than ASML Holding NV. It trades about -0.03 of its total potential returns per unit of risk. ASML Holding NV is currently generating about 0.14 per unit of volatility. If you would invest  67,131  in ASML Holding NV on October 11, 2024 and sell it today you would earn a total of  7,267  from holding ASML Holding NV or generate 10.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	46.34%
Values	Daily Returns

ATH 173 02 OCT 26  vs.  ASML Holding NV

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 latest stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with 04685A3D1 and ASML Holding

The main advantage of trading using opposite 04685A3D1 and ASML Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 04685A3D1 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 ATH 173 02 OCT 26 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.