Correlation Between ASML Holding and Sanyo Chemical
Can any of the company-specific risk be diversified away by investing in both ASML Holding and Sanyo Chemical 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 Sanyo Chemical 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 Sanyo Chemical Industries, you can compare the effects of market volatilities on ASML Holding and Sanyo Chemical 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 Sanyo Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASML Holding and Sanyo Chemical.
Diversification Opportunities for ASML Holding and Sanyo Chemical
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ASML and Sanyo is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and Sanyo Chemical Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanyo Chemical Industries 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 Sanyo Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanyo Chemical Industries has no effect on the direction of ASML Holding i.e., ASML Holding and Sanyo Chemical go up and down completely randomly.
Pair Corralation between ASML Holding and Sanyo Chemical
Assuming the 90 days trading horizon ASML Holding NV is expected to under-perform the Sanyo Chemical. In addition to that, ASML Holding is 2.39 times more volatile than Sanyo Chemical Industries. It trades about -0.08 of its total potential returns per unit of risk. Sanyo Chemical Industries is currently generating about 0.05 per unit of volatility. If you would invest 2,280 in Sanyo Chemical Industries on September 3, 2024 and sell it today you would earn a total of 160.00 from holding Sanyo Chemical Industries or generate 7.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASML Holding NV vs. Sanyo Chemical Industries
Performance |
| Timeline |
| ASML Holding NV |
| Sanyo Chemical Industries |
ASML Holding and Sanyo Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASML Holding and Sanyo Chemical
The main advantage of trading using opposite ASML Holding and Sanyo Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASML Holding position performs unexpectedly, Sanyo Chemical 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 Sanyo Chemical will offset losses from the drop in Sanyo Chemical's long position.| ASML Holding vs. Sanyo Chemical Industries | ASML Holding vs. SEKISUI CHEMICAL | ASML Holding vs. TIANDE CHEMICAL | ASML Holding vs. WillScot Mobile Mini |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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