Correlation Between ASML Holding and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both ASML Holding and IShares MSCI 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 IShares MSCI 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 iShares MSCI EM, you can compare the effects of market volatilities on ASML Holding and IShares MSCI 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 IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASML Holding and IShares MSCI.
Diversification Opportunities for ASML Holding and IShares MSCI
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between ASML and IShares is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and iShares MSCI EM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI EM 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 IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI EM has no effect on the direction of ASML Holding i.e., ASML Holding and IShares MSCI go up and down completely randomly.
Pair Corralation between ASML Holding and IShares MSCI
Assuming the 90 days trading horizon ASML Holding NV is expected to generate 3.2 times more return on investment than IShares MSCI. However, ASML Holding is 3.2 times more volatile than iShares MSCI EM. It trades about 0.13 of its potential returns per unit of risk. iShares MSCI EM is currently generating about -0.04 per unit of risk. If you would invest 61,820 in ASML Holding NV on September 3, 2024 and sell it today you would earn a total of 4,020 from holding ASML Holding NV or generate 6.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASML Holding NV vs. iShares MSCI EM
Performance |
| Timeline |
| ASML Holding NV |
| iShares MSCI EM |
ASML Holding and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASML Holding and IShares MSCI
The main advantage of trading using opposite ASML Holding and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASML Holding position performs unexpectedly, IShares MSCI 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 IShares MSCI will offset losses from the drop in IShares MSCI's long position.| ASML Holding vs. Adyen NV | ASML Holding vs. Prosus NV | ASML Holding vs. Koninklijke Philips NV | ASML Holding vs. Koninklijke Ahold Delhaize |
| IShares MSCI vs. Vanguard FTSE Developed | IShares MSCI vs. HSBC MSCI Japan | IShares MSCI vs. iShares II Public | IShares MSCI vs. Hydratec Industries NV |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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