Correlation Between ASML Holding and Ultra Clean
Can any of the company-specific risk be diversified away by investing in both ASML Holding and Ultra Clean 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 Ultra Clean 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 Ultra Clean Holdings, you can compare the effects of market volatilities on ASML Holding and Ultra Clean 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 Ultra Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASML Holding and Ultra Clean.
Diversification Opportunities for ASML Holding and Ultra Clean
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ASML and Ultra is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and Ultra Clean Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultra Clean Holdings 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 Ultra Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultra Clean Holdings has no effect on the direction of ASML Holding i.e., ASML Holding and Ultra Clean go up and down completely randomly.
Pair Corralation between ASML Holding and Ultra Clean
Given the investment horizon of 90 days ASML Holding NV is expected to under-perform the Ultra Clean. But the stock apears to be less risky and, when comparing its historical volatility, ASML Holding NV is 1.56 times less risky than Ultra Clean. The stock trades about -0.11 of its potential returns per unit of risk. The Ultra Clean Holdings is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,505 in Ultra Clean Holdings on August 27, 2024 and sell it today you would earn a total of 225.00 from holding Ultra Clean Holdings or generate 6.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASML Holding NV vs. Ultra Clean Holdings
Performance |
| Timeline |
| ASML Holding NV |
| Ultra Clean Holdings |
ASML Holding and Ultra Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASML Holding and Ultra Clean
The main advantage of trading using opposite ASML Holding and Ultra Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASML Holding position performs unexpectedly, Ultra Clean 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 Ultra Clean will offset losses from the drop in Ultra Clean's long position.| ASML Holding vs. Applied Materials | ASML Holding vs. KLA Tencor | ASML Holding vs. Axcelis Technologies | ASML Holding vs. Teradyne |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |