Correlation Between ASML Holding and Amtech Systems
Can any of the company-specific risk be diversified away by investing in both ASML Holding and Amtech Systems 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 Amtech Systems 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 Amtech Systems, you can compare the effects of market volatilities on ASML Holding and Amtech Systems 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 Amtech Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASML Holding and Amtech Systems.
Diversification Opportunities for ASML Holding and Amtech Systems
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ASML and Amtech is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and Amtech Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amtech Systems 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 Amtech Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amtech Systems has no effect on the direction of ASML Holding i.e., ASML Holding and Amtech Systems go up and down completely randomly.
Pair Corralation between ASML Holding and Amtech Systems
Given the investment horizon of 90 days ASML Holding NV is expected to under-perform the Amtech Systems. In addition to that, ASML Holding is 1.17 times more volatile than Amtech Systems. It trades about -0.11 of its total potential returns per unit of risk. Amtech Systems is currently generating about 0.01 per unit of volatility. If you would invest 574.00 in Amtech Systems on August 27, 2024 and sell it today you would earn a total of 1.00 from holding Amtech Systems or generate 0.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASML Holding NV vs. Amtech Systems
Performance |
| Timeline |
| ASML Holding NV |
| Amtech Systems |
ASML Holding and Amtech Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASML Holding and Amtech Systems
The main advantage of trading using opposite ASML Holding and Amtech Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASML Holding position performs unexpectedly, Amtech Systems 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 Amtech Systems will offset losses from the drop in Amtech Systems' long position.| ASML Holding vs. Applied Materials | ASML Holding vs. KLA Tencor | ASML Holding vs. Axcelis Technologies | ASML Holding vs. Teradyne |
| Amtech Systems vs. Ultra Clean Holdings | Amtech Systems vs. Veeco Instruments | Amtech Systems vs. Cohu Inc | Amtech Systems vs. Onto Innovation |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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