Correlation Between ASML Holding and Virtus Investment
Can any of the company-specific risk be diversified away by investing in both ASML Holding and Virtus Investment 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 Virtus Investment 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 Virtus Investment Partners,, you can compare the effects of market volatilities on ASML Holding and Virtus Investment 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 Virtus Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASML Holding and Virtus Investment.
Diversification Opportunities for ASML Holding and Virtus Investment
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ASML and Virtus is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and Virtus Investment Partners, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Investment 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 Virtus Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Investment has no effect on the direction of ASML Holding i.e., ASML Holding and Virtus Investment go up and down completely randomly.
Pair Corralation between ASML Holding and Virtus Investment
Given the investment horizon of 90 days ASML Holding NV is expected to under-perform the Virtus Investment. In addition to that, ASML Holding is 1.48 times more volatile than Virtus Investment Partners,. It trades about -0.02 of its total potential returns per unit of risk. Virtus Investment Partners, is currently generating about -0.02 per unit of volatility. If you would invest 22,558 in Virtus Investment Partners, on November 4, 2024 and sell it today you would lose (2,608) from holding Virtus Investment Partners, or give up 11.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASML Holding NV vs. Virtus Investment Partners,
Performance |
| Timeline |
| ASML Holding NV |
| Virtus Investment |
ASML Holding and Virtus Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASML Holding and Virtus Investment
The main advantage of trading using opposite ASML Holding and Virtus Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASML Holding position performs unexpectedly, Virtus Investment 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 Virtus Investment will offset losses from the drop in Virtus Investment's long position.| ASML Holding vs. Applied Materials | ASML Holding vs. KLA Tencor | ASML Holding vs. Axcelis Technologies | ASML Holding vs. Teradyne |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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