Correlation Between Avanos Medical and ASML HOLDING
Can any of the company-specific risk be diversified away by investing in both Avanos Medical 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 Avanos Medical and ASML HOLDING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avanos Medical and ASML HOLDING NY, you can compare the effects of market volatilities on Avanos Medical 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 Avanos Medical with a short position of ASML HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avanos Medical and ASML HOLDING.
Diversification Opportunities for Avanos Medical and ASML HOLDING
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Avanos and ASML is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Avanos Medical and ASML HOLDING NY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASML HOLDING NY and Avanos Medical 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 Avanos Medical 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 NY has no effect on the direction of Avanos Medical i.e., Avanos Medical and ASML HOLDING go up and down completely randomly.
Pair Corralation between Avanos Medical and ASML HOLDING
Assuming the 90 days trading horizon Avanos Medical is expected to under-perform the ASML HOLDING. In addition to that, Avanos Medical is 2.63 times more volatile than ASML HOLDING NY. It trades about -0.09 of its total potential returns per unit of risk. ASML HOLDING NY is currently generating about 0.01 per unit of volatility. If you would invest 65,436 in ASML HOLDING NY on August 28, 2024 and sell it today you would lose (36.00) from holding ASML HOLDING NY or give up 0.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avanos Medical vs. ASML HOLDING NY
Performance |
| Timeline |
| Avanos Medical |
| ASML HOLDING NY |
Avanos Medical and ASML HOLDING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avanos Medical and ASML HOLDING
The main advantage of trading using opposite Avanos Medical and ASML HOLDING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avanos Medical 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.| Avanos Medical vs. Apple Inc | Avanos Medical vs. Apple Inc | Avanos Medical vs. Apple Inc | Avanos Medical vs. Apple Inc |
| ASML HOLDING vs. CARSALESCOM | ASML HOLDING vs. Sims Metal Management | ASML HOLDING vs. Transport International Holdings | ASML HOLDING vs. Perdoceo Education |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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