Correlation Between ASML Holding and China Teletech
Can any of the company-specific risk be diversified away by investing in both ASML Holding and China Teletech 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 China Teletech 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 China Teletech Holding, you can compare the effects of market volatilities on ASML Holding and China Teletech 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 China Teletech. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASML Holding and China Teletech.
Diversification Opportunities for ASML Holding and China Teletech
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ASML and China is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and China Teletech Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Teletech Holding 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 China Teletech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Teletech Holding has no effect on the direction of ASML Holding i.e., ASML Holding and China Teletech go up and down completely randomly.
Pair Corralation between ASML Holding and China Teletech
Given the investment horizon of 90 days ASML Holding is expected to generate 179.63 times less return on investment than China Teletech. But when comparing it to its historical volatility, ASML Holding NV is 75.87 times less risky than China Teletech. It trades about 0.1 of its potential returns per unit of risk. China Teletech Holding is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 0.13 in China Teletech Holding on November 2, 2024 and sell it today you would earn a total of 20,000 from holding China Teletech Holding or generate 1.538451538E7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
ASML Holding NV vs. China Teletech Holding
Performance |
| Timeline |
| ASML Holding NV |
| China Teletech Holding |
ASML Holding and China Teletech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASML Holding and China Teletech
The main advantage of trading using opposite ASML Holding and China Teletech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASML Holding position performs unexpectedly, China Teletech 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 China Teletech will offset losses from the drop in China Teletech's long position.| ASML Holding vs. Applied Materials | ASML Holding vs. KLA Tencor | ASML Holding vs. Axcelis Technologies | ASML Holding vs. Teradyne |
| China Teletech vs. Oncologix Tech | China Teletech vs. Aqua Power Systems | China Teletech vs. TransAKT | China Teletech vs. China Health Management |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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