Correlation Between ASML Holding and Roma Green
Can any of the company-specific risk be diversified away by investing in both ASML Holding and Roma Green 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 Roma Green 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 Roma Green Finance, you can compare the effects of market volatilities on ASML Holding and Roma Green 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 Roma Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASML Holding and Roma Green.
Diversification Opportunities for ASML Holding and Roma Green
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between ASML and Roma is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and Roma Green Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roma Green Finance 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 Roma Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roma Green Finance has no effect on the direction of ASML Holding i.e., ASML Holding and Roma Green go up and down completely randomly.
Pair Corralation between ASML Holding and Roma Green
Given the investment horizon of 90 days ASML Holding NV is expected to under-perform the Roma Green. But the stock apears to be less risky and, when comparing its historical volatility, ASML Holding NV is 2.09 times less risky than Roma Green. The stock trades about -0.02 of its potential returns per unit of risk. The Roma Green Finance is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 60.00 in Roma Green Finance on October 24, 2024 and sell it today you would earn a total of 4.00 from holding Roma Green Finance or generate 6.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASML Holding NV vs. Roma Green Finance
Performance |
| Timeline |
| ASML Holding NV |
| Roma Green Finance |
ASML Holding and Roma Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASML Holding and Roma Green
The main advantage of trading using opposite ASML Holding and Roma Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASML Holding position performs unexpectedly, Roma Green 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 Roma Green will offset losses from the drop in Roma Green's long position.| ASML Holding vs. Applied Materials | ASML Holding vs. KLA Tencor | ASML Holding vs. Axcelis Technologies | ASML Holding vs. Teradyne |
| Roma Green vs. FormFactor | Roma Green vs. Globalfoundries | Roma Green vs. Compania Cervecerias Unidas | Roma Green vs. ASML Holding NV |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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