Correlation Between ASML Holding and International Game

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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

ASMLInternationalDiversified AwayASMLInternationalDiversified Away100%
-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 Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy95.65%
ValuesDaily Returns

ASML Holding NV  vs.  International Game Technology

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -15-10-5051015
JavaScript chart by amCharts 3.21.15ASME 7IG
       Timeline  
ASML Holding NV 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in ASML Holding NV are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, ASML Holding reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb620640660680700720740760
International Game 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days International Game Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, International Game is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1616.51717.51818.519

ASML Holding and International Game Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.6-4.94-3.28-1.630.01.683.425.166.98.64 0.020.040.060.080.100.12
JavaScript chart by amCharts 3.21.15ASME 7IG
       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.
The idea behind ASML Holding NV and International Game Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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