Correlation Between ASML Holding and Anthem
Can any of the company-specific risk be diversified away by investing in both ASML Holding and Anthem 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 Anthem 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 Anthem Inc, you can compare the effects of market volatilities on ASML Holding and Anthem 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 Anthem. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASML Holding and Anthem.
Diversification Opportunities for ASML Holding and Anthem
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ASML and Anthem is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and Anthem Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anthem Inc 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 Anthem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anthem Inc has no effect on the direction of ASML Holding i.e., ASML Holding and Anthem go up and down completely randomly.
Pair Corralation between ASML Holding and Anthem
Assuming the 90 days trading horizon ASML Holding NV is expected to under-perform the Anthem. In addition to that, ASML Holding is 1.65 times more volatile than Anthem Inc. It trades about -0.06 of its total potential returns per unit of risk. Anthem Inc is currently generating about 0.16 per unit of volatility. If you would invest 35,950 in Anthem Inc on November 6, 2024 and sell it today you would earn a total of 1,750 from holding Anthem Inc or generate 4.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASML Holding NV vs. Anthem Inc
Performance |
| Timeline |
| ASML Holding NV |
| Anthem Inc |
ASML Holding and Anthem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASML Holding and Anthem
The main advantage of trading using opposite ASML Holding and Anthem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASML Holding position performs unexpectedly, Anthem 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 Anthem will offset losses from the drop in Anthem's long position.| ASML Holding vs. CDL INVESTMENT | ASML Holding vs. New Residential Investment | ASML Holding vs. Sekisui Chemical Co | ASML Holding vs. Apollo Investment Corp |
| Anthem vs. Lendlease Group | Anthem vs. Choice Hotels International | Anthem vs. Dalata Hotel Group | Anthem vs. HYATT HOTELS A |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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