Correlation Between ASML Holding and International Game
Can any of the company-specific risk be diversified away by investing in both ASML Holding and International Game 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 ASML Holding and International Game into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASML Holding NV and International Game Technology, you can compare the effects of market volatilities on ASML Holding and International Game 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 ASML Holding with a short position of International Game. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASML Holding and International Game.
Diversification Opportunities for ASML Holding and International Game
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ASML and International is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and International Game Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Game and ASML Holding 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 ASML Holding NV are associated (or correlated) with International Game. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Game has no effect on the direction of ASML Holding i.e., ASML Holding and International Game go up and down completely randomly.
Pair Corralation between ASML Holding and International Game
Assuming the 90 days trading horizon ASML Holding NV is expected to under-perform the International Game. In addition to that, ASML Holding is 1.38 times more volatile than International Game Technology. It trades about -0.07 of its total potential returns per unit of risk. International Game Technology is currently generating about 0.04 per unit of volatility. If you would invest 1,660 in International Game Technology on November 21, 2024 and sell it today you would earn a total of 20.00 from holding International Game Technology or generate 1.2% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 95.65% |
Values | Daily Returns |
ASML Holding NV vs. International Game Technology
Performance |
Timeline |
ASML Holding NV |
International Game |
ASML Holding and International Game Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ASML Holding and International Game
The main advantage of trading using opposite ASML Holding and International Game positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASML Holding position performs unexpectedly, International Game 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 International Game will offset losses from the drop in International Game's long position.ASML Holding vs. Take Two Interactive Software | ||
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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