Correlation Between ASML Holding and NN Group
Can any of the company-specific risk be diversified away by investing in both ASML Holding and NN Group 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 NN Group 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 NN Group NV, you can compare the effects of market volatilities on ASML Holding and NN Group 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 NN Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASML Holding and NN Group.
Diversification Opportunities for ASML Holding and NN Group
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ASML and NN Group is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and NN Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NN Group NV 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 NN Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NN Group NV has no effect on the direction of ASML Holding i.e., ASML Holding and NN Group go up and down completely randomly.
Pair Corralation between ASML Holding and NN Group
Assuming the 90 days trading horizon ASML Holding NV is expected to under-perform the NN Group. In addition to that, ASML Holding is 2.55 times more volatile than NN Group NV. It trades about -0.06 of its total potential returns per unit of risk. NN Group NV is currently generating about -0.1 per unit of volatility. If you would invest 4,583 in NN Group NV on August 24, 2024 and sell it today you would lose (99.00) from holding NN Group NV or give up 2.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASML Holding NV vs. NN Group NV
Performance |
| Timeline |
| ASML Holding NV |
| NN Group NV |
ASML Holding and NN Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASML Holding and NN Group
The main advantage of trading using opposite ASML Holding and NN Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASML Holding position performs unexpectedly, NN Group 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 NN Group will offset losses from the drop in NN Group'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 |
| NN Group vs. Koninklijke Ahold Delhaize | NN Group vs. BE Semiconductor Industries | NN Group vs. Aegon NV | NN Group vs. Aalberts 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 CEOs Directory module to screen CEOs from public companies around the world.
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