Correlation Between Azerion Group and ASML Holding
Can any of the company-specific risk be diversified away by investing in both Azerion Group and ASML Holding 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 Azerion Group and ASML Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Azerion Group NV and ASML Holding NV, you can compare the effects of market volatilities on Azerion Group and ASML Holding 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 Azerion Group with a short position of ASML Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Azerion Group and ASML Holding.
Diversification Opportunities for Azerion Group and ASML Holding
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Azerion and ASML is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Azerion Group NV and ASML Holding NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASML Holding NV and Azerion Group 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 Azerion Group NV are associated (or correlated) with ASML Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASML Holding NV has no effect on the direction of Azerion Group i.e., Azerion Group and ASML Holding go up and down completely randomly.
Pair Corralation between Azerion Group and ASML Holding
Assuming the 90 days trading horizon Azerion Group NV is expected to under-perform the ASML Holding. In addition to that, Azerion Group is 1.23 times more volatile than ASML Holding NV. It trades about -0.16 of its total potential returns per unit of risk. ASML Holding NV is currently generating about -0.02 per unit of volatility. If you would invest 65,520 in ASML Holding NV on August 30, 2024 and sell it today you would lose (1,230) from holding ASML Holding NV or give up 1.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Azerion Group NV vs. ASML Holding NV
Performance |
| Timeline |
| Azerion Group NV |
| ASML Holding NV |
Azerion Group and ASML Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Azerion Group and ASML Holding
The main advantage of trading using opposite Azerion Group and ASML Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Azerion Group position performs unexpectedly, ASML Holding 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 ASML Holding will offset losses from the drop in ASML Holding's long position.| Azerion Group vs. ASML Holding NV | Azerion Group vs. Prosus NV | Azerion Group vs. Shell PLC | Azerion Group vs. Unilever PLC |
| ASML Holding vs. Ctac NV | ASML Holding vs. Value8 NV | ASML Holding vs. New Sources Energy | ASML Holding vs. Lavide 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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