Correlation Between ASML Holding and Nordic Semiconductor
Can any of the company-specific risk be diversified away by investing in both ASML Holding and Nordic Semiconductor 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 Nordic Semiconductor 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 Nordic Semiconductor ASA, you can compare the effects of market volatilities on ASML Holding and Nordic Semiconductor 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 Nordic Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASML Holding and Nordic Semiconductor.
Diversification Opportunities for ASML Holding and Nordic Semiconductor
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ASML and Nordic is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and Nordic Semiconductor ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic Semiconductor ASA 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 Nordic Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic Semiconductor ASA has no effect on the direction of ASML Holding i.e., ASML Holding and Nordic Semiconductor go up and down completely randomly.
Pair Corralation between ASML Holding and Nordic Semiconductor
Given the investment horizon of 90 days ASML Holding NV is expected to generate 0.75 times more return on investment than Nordic Semiconductor. However, ASML Holding NV is 1.33 times less risky than Nordic Semiconductor. It trades about 0.08 of its potential returns per unit of risk. Nordic Semiconductor ASA is currently generating about 0.03 per unit of risk. If you would invest 67,116 in ASML Holding NV on November 2, 2024 and sell it today you would earn a total of 6,583 from holding ASML Holding NV or generate 9.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASML Holding NV vs. Nordic Semiconductor ASA
Performance |
| Timeline |
| ASML Holding NV |
| Nordic Semiconductor ASA |
ASML Holding and Nordic Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASML Holding and Nordic Semiconductor
The main advantage of trading using opposite ASML Holding and Nordic Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASML Holding position performs unexpectedly, Nordic Semiconductor 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 Nordic Semiconductor will offset losses from the drop in Nordic Semiconductor's long position.| ASML Holding vs. Applied Materials | ASML Holding vs. KLA Tencor | ASML Holding vs. Axcelis Technologies | ASML Holding vs. Teradyne |
| Nordic Semiconductor vs. Synaptics Incorporated | Nordic Semiconductor vs. MACOM Technology Solutions | Nordic Semiconductor vs. Silicon Laboratories | Nordic Semiconductor vs. Power Integrations |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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