Correlation Between Aalberts Industries and ASM International
Can any of the company-specific risk be diversified away by investing in both Aalberts Industries and ASM International 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 Aalberts Industries and ASM International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aalberts Industries NV and ASM International NV, you can compare the effects of market volatilities on Aalberts Industries and ASM International 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 Aalberts Industries with a short position of ASM International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aalberts Industries and ASM International.
Diversification Opportunities for Aalberts Industries and ASM International
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aalberts and ASM is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Aalberts Industries NV and ASM International NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASM International and Aalberts Industries 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 Aalberts Industries NV are associated (or correlated) with ASM International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASM International has no effect on the direction of Aalberts Industries i.e., Aalberts Industries and ASM International go up and down completely randomly.
Pair Corralation between Aalberts Industries and ASM International
Assuming the 90 days trading horizon Aalberts Industries NV is expected to under-perform the ASM International. But the stock apears to be less risky and, when comparing its historical volatility, Aalberts Industries NV is 2.63 times less risky than ASM International. The stock trades about -0.01 of its potential returns per unit of risk. The ASM International NV is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 56,780 in ASM International NV on November 3, 2024 and sell it today you would lose (80.00) from holding ASM International NV or give up 0.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aalberts Industries NV vs. ASM International NV
Performance |
| Timeline |
| Aalberts Industries |
| ASM International |
Aalberts Industries and ASM International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aalberts Industries and ASM International
The main advantage of trading using opposite Aalberts Industries and ASM International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aalberts Industries position performs unexpectedly, ASM International 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 ASM International will offset losses from the drop in ASM International's long position.| Aalberts Industries vs. TKH Group NV | Aalberts Industries vs. Koninklijke Vopak NV | Aalberts Industries vs. Randstad NV | Aalberts Industries vs. SBM Offshore NV |
| ASM International vs. BE Semiconductor Industries | ASM International vs. ASML Holding NV | ASM International vs. NN Group NV | ASM International vs. Aalberts Industries NV |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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