Correlation Between ASML Holding and Kulicke
Can any of the company-specific risk be diversified away by investing in both ASML Holding and Kulicke 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 Kulicke 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 Kulicke and Soffa, you can compare the effects of market volatilities on ASML Holding and Kulicke 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 Kulicke. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASML Holding and Kulicke.
Diversification Opportunities for ASML Holding and Kulicke
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ASML and Kulicke is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and Kulicke and Soffa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kulicke and Soffa 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 Kulicke. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kulicke and Soffa has no effect on the direction of ASML Holding i.e., ASML Holding and Kulicke go up and down completely randomly.
Pair Corralation between ASML Holding and Kulicke
Assuming the 90 days trading horizon ASML Holding NV is expected to generate 1.1 times more return on investment than Kulicke. However, ASML Holding is 1.1 times more volatile than Kulicke and Soffa. It trades about 0.02 of its potential returns per unit of risk. Kulicke and Soffa is currently generating about 0.01 per unit of risk. If you would invest 60,810 in ASML Holding NV on August 24, 2024 and sell it today you would earn a total of 1,690 from holding ASML Holding NV or generate 2.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
ASML Holding NV vs. Kulicke and Soffa
Performance |
| Timeline |
| ASML Holding NV |
| Kulicke and Soffa |
ASML Holding and Kulicke Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASML Holding and Kulicke
The main advantage of trading using opposite ASML Holding and Kulicke positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASML Holding position performs unexpectedly, Kulicke 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 Kulicke will offset losses from the drop in Kulicke's long position.| ASML Holding vs. American Homes 4 | ASML Holding vs. AXWAY SOFTWARE EO | ASML Holding vs. Take Two Interactive Software | ASML Holding vs. PSI Software AG |
| Kulicke vs. United Insurance Holdings | Kulicke vs. Australian Agricultural | Kulicke vs. Japan Post Insurance | Kulicke vs. AUST AGRICULTURAL |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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