Correlation Between Superior Plus and ASML Holding
Can any of the company-specific risk be diversified away by investing in both Superior Plus 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 Superior Plus and ASML Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Superior Plus Corp and ASML Holding NV, you can compare the effects of market volatilities on Superior Plus 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 Superior Plus with a short position of ASML Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and ASML Holding.
Diversification Opportunities for Superior Plus and ASML Holding
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Superior and ASML is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp 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 Superior Plus 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 Superior Plus Corp 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 Superior Plus i.e., Superior Plus and ASML Holding go up and down completely randomly.
Pair Corralation between Superior Plus and ASML Holding
Assuming the 90 days horizon Superior Plus is expected to generate 4.09 times less return on investment than ASML Holding. In addition to that, Superior Plus is 2.52 times more volatile than ASML Holding NV. It trades about 0.01 of its total potential returns per unit of risk. ASML Holding NV is currently generating about 0.07 per unit of volatility. If you would invest 63,300 in ASML Holding NV on August 31, 2024 and sell it today you would earn a total of 1,680 from holding ASML Holding NV or generate 2.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. ASML Holding NV
Performance |
| Timeline |
| Superior Plus Corp |
| ASML Holding NV |
Superior Plus and ASML Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and ASML Holding
The main advantage of trading using opposite Superior Plus and ASML Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus 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.| Superior Plus vs. BROADSTNET LEADL 00025 | Superior Plus vs. Mitsubishi Materials | Superior Plus vs. Martin Marietta Materials | Superior Plus vs. Summit Materials |
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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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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