Correlation Between ASML Holding and Almaden Minerals
Can any of the company-specific risk be diversified away by investing in both ASML Holding and Almaden Minerals 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 Almaden Minerals 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 Almaden Minerals, you can compare the effects of market volatilities on ASML Holding and Almaden Minerals 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 Almaden Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASML Holding and Almaden Minerals.
Diversification Opportunities for ASML Holding and Almaden Minerals
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ASML and Almaden is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and Almaden Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Almaden Minerals 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 Almaden Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Almaden Minerals has no effect on the direction of ASML Holding i.e., ASML Holding and Almaden Minerals go up and down completely randomly.
Pair Corralation between ASML Holding and Almaden Minerals
Given the investment horizon of 90 days ASML Holding NV is expected to generate 0.56 times more return on investment than Almaden Minerals. However, ASML Holding NV is 1.79 times less risky than Almaden Minerals. It trades about 0.02 of its potential returns per unit of risk. Almaden Minerals is currently generating about -0.07 per unit of risk. If you would invest 65,834 in ASML Holding NV on November 2, 2024 and sell it today you would earn a total of 8,844 from holding ASML Holding NV or generate 13.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 22.67% |
| Values | Daily Returns |
ASML Holding NV vs. Almaden Minerals
Performance |
| Timeline |
| ASML Holding NV |
| Almaden Minerals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ASML Holding and Almaden Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASML Holding and Almaden Minerals
The main advantage of trading using opposite ASML Holding and Almaden Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASML Holding position performs unexpectedly, Almaden Minerals 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 Almaden Minerals will offset losses from the drop in Almaden Minerals' long position.| ASML Holding vs. Applied Materials | ASML Holding vs. KLA Tencor | ASML Holding vs. Axcelis Technologies | ASML Holding vs. Teradyne |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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