Correlation Between ASML Holding and Brand Engagement
Can any of the company-specific risk be diversified away by investing in both ASML Holding and Brand Engagement 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 Brand Engagement 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 Brand Engagement Network, you can compare the effects of market volatilities on ASML Holding and Brand Engagement 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 Brand Engagement. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASML Holding and Brand Engagement.
Diversification Opportunities for ASML Holding and Brand Engagement
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ASML and Brand is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and Brand Engagement Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brand Engagement Network 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 Brand Engagement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brand Engagement Network has no effect on the direction of ASML Holding i.e., ASML Holding and Brand Engagement go up and down completely randomly.
Pair Corralation between ASML Holding and Brand Engagement
Given the investment horizon of 90 days ASML Holding NV is expected to generate 0.15 times more return on investment than Brand Engagement. However, ASML Holding NV is 6.67 times less risky than Brand Engagement. It trades about 0.12 of its potential returns per unit of risk. Brand Engagement Network is currently generating about -0.13 per unit of risk. If you would invest 69,308 in ASML Holding NV on November 1, 2024 and sell it today you would earn a total of 4,560 from holding ASML Holding NV or generate 6.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 85.0% |
| Values | Daily Returns |
ASML Holding NV vs. Brand Engagement Network
Performance |
| Timeline |
| ASML Holding NV |
| Brand Engagement Network |
ASML Holding and Brand Engagement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASML Holding and Brand Engagement
The main advantage of trading using opposite ASML Holding and Brand Engagement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASML Holding position performs unexpectedly, Brand Engagement 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 Brand Engagement will offset losses from the drop in Brand Engagement's long position.| ASML Holding vs. Applied Materials | ASML Holding vs. KLA Tencor | ASML Holding vs. Axcelis Technologies | ASML Holding vs. Teradyne |
| Brand Engagement vs. Compania Cervecerias Unidas | Brand Engagement vs. ASML Holding NV | Brand Engagement vs. Micron Technology | Brand Engagement vs. High Performance Beverages |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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