Correlation Between ASML Holding and Vanguard LifeStrategy
Can any of the company-specific risk be diversified away by investing in both ASML Holding and Vanguard LifeStrategy 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 Vanguard LifeStrategy 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 Vanguard LifeStrategy 80, you can compare the effects of market volatilities on ASML Holding and Vanguard LifeStrategy 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 Vanguard LifeStrategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASML Holding and Vanguard LifeStrategy.
Diversification Opportunities for ASML Holding and Vanguard LifeStrategy
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ASML and Vanguard is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and Vanguard LifeStrategy 80 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard LifeStrategy 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 Vanguard LifeStrategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard LifeStrategy has no effect on the direction of ASML Holding i.e., ASML Holding and Vanguard LifeStrategy go up and down completely randomly.
Pair Corralation between ASML Holding and Vanguard LifeStrategy
Assuming the 90 days trading horizon ASML Holding NV is expected to under-perform the Vanguard LifeStrategy. In addition to that, ASML Holding is 4.68 times more volatile than Vanguard LifeStrategy 80. It trades about -0.05 of its total potential returns per unit of risk. Vanguard LifeStrategy 80 is currently generating about 0.12 per unit of volatility. If you would invest 3,276 in Vanguard LifeStrategy 80 on September 3, 2024 and sell it today you would earn a total of 407.00 from holding Vanguard LifeStrategy 80 or generate 12.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASML Holding NV vs. Vanguard LifeStrategy 80
Performance |
| Timeline |
| ASML Holding NV |
| Vanguard LifeStrategy |
ASML Holding and Vanguard LifeStrategy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASML Holding and Vanguard LifeStrategy
The main advantage of trading using opposite ASML Holding and Vanguard LifeStrategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASML Holding position performs unexpectedly, Vanguard LifeStrategy 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 Vanguard LifeStrategy will offset losses from the drop in Vanguard LifeStrategy'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 |
| Vanguard LifeStrategy vs. Vanguard FTSE All World | Vanguard LifeStrategy vs. Vanguard FTSE Developed | Vanguard LifeStrategy vs. Vanguard FTSE All World | Vanguard LifeStrategy vs. Vanguard FTSE Developed |
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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