Correlation Between ASML HOLDING and NMI Holdings
Can any of the company-specific risk be diversified away by investing in both ASML HOLDING and NMI Holdings 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 NMI Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASML HOLDING NY and NMI Holdings, you can compare the effects of market volatilities on ASML HOLDING and NMI Holdings 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 NMI Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASML HOLDING and NMI Holdings.
Diversification Opportunities for ASML HOLDING and NMI Holdings
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ASML and NMI is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding ASML HOLDING NY and NMI Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NMI Holdings 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 NY are associated (or correlated) with NMI Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NMI Holdings has no effect on the direction of ASML HOLDING i.e., ASML HOLDING and NMI Holdings go up and down completely randomly.
Pair Corralation between ASML HOLDING and NMI Holdings
Assuming the 90 days trading horizon ASML HOLDING NY is expected to under-perform the NMI Holdings. But the stock apears to be less risky and, when comparing its historical volatility, ASML HOLDING NY is 1.24 times less risky than NMI Holdings. The stock trades about -0.04 of its potential returns per unit of risk. The NMI Holdings is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,580 in NMI Holdings on August 28, 2024 and sell it today you would earn a total of 60.00 from holding NMI Holdings or generate 1.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASML HOLDING NY vs. NMI Holdings
Performance |
| Timeline |
| ASML HOLDING NY |
| NMI Holdings |
ASML HOLDING and NMI Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASML HOLDING and NMI Holdings
The main advantage of trading using opposite ASML HOLDING and NMI Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASML HOLDING position performs unexpectedly, NMI Holdings 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 NMI Holdings will offset losses from the drop in NMI Holdings' long position.| ASML HOLDING vs. Applied Materials | ASML HOLDING vs. Superior Plus Corp | ASML HOLDING vs. NMI Holdings | ASML HOLDING vs. Origin Agritech |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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