Correlation Between ASM International and Prosus NV
Can any of the company-specific risk be diversified away by investing in both ASM International and Prosus NV 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 Prosus NV 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 Prosus NV, you can compare the effects of market volatilities on ASM International and Prosus NV 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 Prosus NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASM International and Prosus NV.
Diversification Opportunities for ASM International and Prosus NV
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ASM and Prosus is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding ASM International NV and Prosus NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosus NV 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 Prosus NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosus NV has no effect on the direction of ASM International i.e., ASM International and Prosus NV go up and down completely randomly.
Pair Corralation between ASM International and Prosus NV
Assuming the 90 days trading horizon ASM International NV is expected to generate 1.78 times more return on investment than Prosus NV. However, ASM International is 1.78 times more volatile than Prosus NV. It trades about -0.02 of its potential returns per unit of risk. Prosus NV is currently generating about -0.07 per unit of risk. If you would invest 51,460 in ASM International NV on August 24, 2024 and sell it today you would lose (1,000.00) from holding ASM International NV or give up 1.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASM International NV vs. Prosus NV
Performance |
| Timeline |
| ASM International |
| Prosus NV |
ASM International and Prosus NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASM International and Prosus NV
The main advantage of trading using opposite ASM International and Prosus NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASM International position performs unexpectedly, Prosus NV 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 Prosus NV will offset losses from the drop in Prosus NV'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 |
| Prosus NV vs. Just Eat Takeaway | Prosus NV vs. ASML Holding NV | Prosus NV vs. Koninklijke Ahold Delhaize | Prosus NV vs. Adyen 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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