Correlation Between ASML Holding and Zapp Electric
Can any of the company-specific risk be diversified away by investing in both ASML Holding and Zapp Electric 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 Zapp Electric 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 Zapp Electric Vehicles, you can compare the effects of market volatilities on ASML Holding and Zapp Electric 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 Zapp Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASML Holding and Zapp Electric.
Diversification Opportunities for ASML Holding and Zapp Electric
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ASML and Zapp is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and Zapp Electric Vehicles in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zapp Electric Vehicles 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 Zapp Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zapp Electric Vehicles has no effect on the direction of ASML Holding i.e., ASML Holding and Zapp Electric go up and down completely randomly.
Pair Corralation between ASML Holding and Zapp Electric
Given the investment horizon of 90 days ASML Holding NV is expected to generate 0.15 times more return on investment than Zapp Electric. However, ASML Holding NV is 6.52 times less risky than Zapp Electric. It trades about 0.02 of its potential returns per unit of risk. Zapp Electric Vehicles is currently generating about -0.02 per unit of risk. If you would invest 66,759 in ASML Holding NV on October 25, 2024 and sell it today you would earn a total of 9,912 from holding ASML Holding NV or generate 14.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASML Holding NV vs. Zapp Electric Vehicles
Performance |
| Timeline |
| ASML Holding NV |
| Zapp Electric Vehicles |
ASML Holding and Zapp Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASML Holding and Zapp Electric
The main advantage of trading using opposite ASML Holding and Zapp Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASML Holding position performs unexpectedly, Zapp Electric 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 Zapp Electric will offset losses from the drop in Zapp Electric's long position.| ASML Holding vs. Applied Materials | ASML Holding vs. KLA Tencor | ASML Holding vs. Axcelis Technologies | ASML Holding vs. Teradyne |
| Zapp Electric vs. Allient | Zapp Electric vs. Biglari Holdings | Zapp Electric vs. BJs Restaurants | Zapp Electric vs. Alvotech |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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