Correlation Between ASML Holding and Evolent Health
Can any of the company-specific risk be diversified away by investing in both ASML Holding and Evolent Health 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 Evolent Health 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 Evolent Health, you can compare the effects of market volatilities on ASML Holding and Evolent Health 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 Evolent Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASML Holding and Evolent Health.
Diversification Opportunities for ASML Holding and Evolent Health
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ASML and Evolent is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and Evolent Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolent Health 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 Evolent Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolent Health has no effect on the direction of ASML Holding i.e., ASML Holding and Evolent Health go up and down completely randomly.
Pair Corralation between ASML Holding and Evolent Health
Assuming the 90 days trading horizon ASML Holding NV is expected to generate 0.65 times more return on investment than Evolent Health. However, ASML Holding NV is 1.54 times less risky than Evolent Health. It trades about 0.02 of its potential returns per unit of risk. Evolent Health is currently generating about -0.04 per unit of risk. If you would invest 60,369 in ASML Holding NV on November 1, 2024 and sell it today you would earn a total of 8,471 from holding ASML Holding NV or generate 14.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASML Holding NV vs. Evolent Health
Performance |
| Timeline |
| ASML Holding NV |
| Evolent Health |
ASML Holding and Evolent Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASML Holding and Evolent Health
The main advantage of trading using opposite ASML Holding and Evolent Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASML Holding position performs unexpectedly, Evolent Health 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 Evolent Health will offset losses from the drop in Evolent Health's long position.| ASML Holding vs. INTERCONT HOTELS | ASML Holding vs. PACIFIC ONLINE | ASML Holding vs. Sunstone Hotel Investors | ASML Holding vs. DALATA HOTEL |
| Evolent Health vs. Chiba Bank | Evolent Health vs. Synovus Financial Corp | Evolent Health vs. Casio Computer CoLtd | Evolent Health vs. PNC Financial Services |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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