Correlation Between ASML Holding and Flow Traders
Can any of the company-specific risk be diversified away by investing in both ASML Holding and Flow Traders 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 Flow Traders 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 Flow Traders BV, you can compare the effects of market volatilities on ASML Holding and Flow Traders 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 Flow Traders. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASML Holding and Flow Traders.
Diversification Opportunities for ASML Holding and Flow Traders
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ASML and Flow is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and Flow Traders BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flow Traders BV 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 Flow Traders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flow Traders BV has no effect on the direction of ASML Holding i.e., ASML Holding and Flow Traders go up and down completely randomly.
Pair Corralation between ASML Holding and Flow Traders
Assuming the 90 days trading horizon ASML Holding NV is expected to generate 1.22 times more return on investment than Flow Traders. However, ASML Holding is 1.22 times more volatile than Flow Traders BV. It trades about 0.01 of its potential returns per unit of risk. Flow Traders BV is currently generating about 0.01 per unit of risk. If you would invest 65,809 in ASML Holding NV on September 1, 2024 and sell it today you would earn a total of 31.00 from holding ASML Holding NV or generate 0.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASML Holding NV vs. Flow Traders BV
Performance |
| Timeline |
| ASML Holding NV |
| Flow Traders BV |
ASML Holding and Flow Traders Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASML Holding and Flow Traders
The main advantage of trading using opposite ASML Holding and Flow Traders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASML Holding position performs unexpectedly, Flow Traders 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 Flow Traders will offset losses from the drop in Flow Traders' long position.| ASML Holding vs. Adyen NV | ASML Holding vs. Prosus NV | ASML Holding vs. Koninklijke Philips NV | ASML Holding vs. Koninklijke Ahold Delhaize |
| Flow Traders vs. Aegon NV | Flow Traders vs. ABN Amro Group | Flow Traders vs. Koninklijke Philips NV | Flow Traders vs. Unilever PLC |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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