Correlation Between ASM International and Fastned BV
Can any of the company-specific risk be diversified away by investing in both ASM International and Fastned BV 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 ASM International and Fastned BV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASM International NV and Fastned BV, you can compare the effects of market volatilities on ASM International and Fastned BV 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 ASM International with a short position of Fastned BV. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASM International and Fastned BV.
Diversification Opportunities for ASM International and Fastned BV
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ASM and Fastned is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding ASM International NV and Fastned BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fastned BV and ASM International 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 ASM International NV are associated (or correlated) with Fastned BV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fastned BV has no effect on the direction of ASM International i.e., ASM International and Fastned BV go up and down completely randomly.
Pair Corralation between ASM International and Fastned BV
Assuming the 90 days trading horizon ASM International NV is expected to generate 1.01 times more return on investment than Fastned BV. However, ASM International is 1.01 times more volatile than Fastned BV. It trades about -0.04 of its potential returns per unit of risk. Fastned BV is currently generating about -0.22 per unit of risk. If you would invest 51,860 in ASM International NV on August 25, 2024 and sell it today you would lose (1,400) from holding ASM International NV or give up 2.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
ASM International NV vs. Fastned BV
Performance |
| Timeline |
| ASM International |
| Fastned BV |
ASM International and Fastned BV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASM International and Fastned BV
The main advantage of trading using opposite ASM International and Fastned BV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASM International position performs unexpectedly, Fastned BV 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 Fastned BV will offset losses from the drop in Fastned BV's long position.| ASM International vs. BE Semiconductor Industries | ASM International vs. ASML Holding NV | ASM International vs. NN Group NV | ASM International vs. Aalberts Industries NV |
| Fastned BV vs. Alfen Beheer BV | Fastned BV vs. BE Semiconductor Industries | Fastned BV vs. Just Eat Takeaway | Fastned BV vs. PostNL 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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