Correlation Between Aalberts Industries and ASML Holding
Can any of the company-specific risk be diversified away by investing in both Aalberts Industries 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 Aalberts Industries and ASML Holding 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 ASML Holding NV, you can compare the effects of market volatilities on Aalberts Industries 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 Aalberts Industries with a short position of ASML Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aalberts Industries and ASML Holding.
Diversification Opportunities for Aalberts Industries and ASML Holding
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aalberts and ASML is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Aalberts Industries NV 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 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 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 Aalberts Industries i.e., Aalberts Industries and ASML Holding go up and down completely randomly.
Pair Corralation between Aalberts Industries and ASML Holding
Assuming the 90 days trading horizon Aalberts Industries is expected to generate 19.25 times less return on investment than ASML Holding. But when comparing it to its historical volatility, Aalberts Industries NV is 1.27 times less risky than ASML Holding. It trades about 0.0 of its potential returns per unit of risk. ASML Holding NV is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 55,512 in ASML Holding NV on August 28, 2024 and sell it today you would earn a total of 8,488 from holding ASML Holding NV or generate 15.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aalberts Industries NV vs. ASML Holding NV
Performance |
| Timeline |
| Aalberts Industries |
| ASML Holding NV |
Aalberts Industries and ASML Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aalberts Industries and ASML Holding
The main advantage of trading using opposite Aalberts Industries and ASML Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aalberts Industries 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.| Aalberts Industries vs. TKH Group NV | Aalberts Industries vs. Koninklijke Vopak NV | Aalberts Industries vs. Randstad NV | Aalberts Industries vs. SBM Offshore NV |
| ASML Holding vs. Adyen NV | ASML Holding vs. Prosus NV | ASML Holding vs. Koninklijke Philips NV | ASML Holding vs. Koninklijke Ahold Delhaize |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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