Correlation Between ASML HOLDING and Tokyo Electron
Can any of the company-specific risk be diversified away by investing in both ASML HOLDING and Tokyo Electron 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 Tokyo Electron 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 Tokyo Electron Limited, you can compare the effects of market volatilities on ASML HOLDING and Tokyo Electron 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 Tokyo Electron. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASML HOLDING and Tokyo Electron.
Diversification Opportunities for ASML HOLDING and Tokyo Electron
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ASML and Tokyo is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding ASML HOLDING NY and Tokyo Electron Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tokyo Electron 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 Tokyo Electron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tokyo Electron has no effect on the direction of ASML HOLDING i.e., ASML HOLDING and Tokyo Electron go up and down completely randomly.
Pair Corralation between ASML HOLDING and Tokyo Electron
Assuming the 90 days trading horizon ASML HOLDING is expected to generate 2.95 times less return on investment than Tokyo Electron. But when comparing it to its historical volatility, ASML HOLDING NY is 1.66 times less risky than Tokyo Electron. It trades about 0.03 of its potential returns per unit of risk. Tokyo Electron Limited is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 14,490 in Tokyo Electron Limited on August 31, 2024 and sell it today you would earn a total of 420.00 from holding Tokyo Electron Limited or generate 2.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASML HOLDING NY vs. Tokyo Electron Limited
Performance |
| Timeline |
| ASML HOLDING NY |
| Tokyo Electron |
ASML HOLDING and Tokyo Electron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASML HOLDING and Tokyo Electron
The main advantage of trading using opposite ASML HOLDING and Tokyo Electron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASML HOLDING position performs unexpectedly, Tokyo Electron 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 Tokyo Electron will offset losses from the drop in Tokyo Electron's long position.| ASML HOLDING vs. SEI INVESTMENTS | ASML HOLDING vs. PENN NATL GAMING | ASML HOLDING vs. Virtus Investment Partners | ASML HOLDING vs. ECHO INVESTMENT ZY |
| Tokyo Electron vs. EAT WELL INVESTMENT | Tokyo Electron vs. INTERSHOP Communications Aktiengesellschaft | Tokyo Electron vs. Chunghwa Telecom Co | Tokyo Electron vs. JAPAN TOBACCO UNSPADR12 |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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