Correlation Between ASML Holding and NedSense Enterprises
Can any of the company-specific risk be diversified away by investing in both ASML Holding and NedSense Enterprises 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 NedSense Enterprises 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 NedSense Enterprises NV, you can compare the effects of market volatilities on ASML Holding and NedSense Enterprises 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 NedSense Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASML Holding and NedSense Enterprises.
Diversification Opportunities for ASML Holding and NedSense Enterprises
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ASML and NedSense is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and NedSense Enterprises NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NedSense Enterprises 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 NedSense Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NedSense Enterprises has no effect on the direction of ASML Holding i.e., ASML Holding and NedSense Enterprises go up and down completely randomly.
Pair Corralation between ASML Holding and NedSense Enterprises
Assuming the 90 days trading horizon ASML Holding NV is expected to generate 0.51 times more return on investment than NedSense Enterprises. However, ASML Holding NV is 1.98 times less risky than NedSense Enterprises. It trades about 0.01 of its potential returns per unit of risk. NedSense Enterprises NV is currently generating about -0.01 per unit of risk. If you would invest 66,658 in ASML Holding NV on August 27, 2024 and sell it today you would lose (2,448) from holding ASML Holding NV or give up 3.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
ASML Holding NV vs. NedSense Enterprises NV
Performance |
| Timeline |
| ASML Holding NV |
| NedSense Enterprises |
ASML Holding and NedSense Enterprises Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASML Holding and NedSense Enterprises
The main advantage of trading using opposite ASML Holding and NedSense Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASML Holding position performs unexpectedly, NedSense Enterprises 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 NedSense Enterprises will offset losses from the drop in NedSense Enterprises' long position.| ASML Holding vs. Adyen NV | ASML Holding vs. Prosus NV | ASML Holding vs. Koninklijke Philips NV | ASML Holding vs. Koninklijke Ahold Delhaize |
| NedSense Enterprises vs. Ctac NV | NedSense Enterprises vs. Value8 NV | NedSense Enterprises vs. New Sources Energy | NedSense Enterprises vs. Lavide Holding 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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