Correlation Between REVO INSURANCE and ASML Holding
Can any of the company-specific risk be diversified away by investing in both REVO INSURANCE 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 REVO INSURANCE and ASML Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REVO INSURANCE SPA and ASML Holding NV, you can compare the effects of market volatilities on REVO INSURANCE 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 REVO INSURANCE with a short position of ASML Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of REVO INSURANCE and ASML Holding.
Diversification Opportunities for REVO INSURANCE and ASML Holding
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between REVO and ASML is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding REVO INSURANCE SPA 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 REVO INSURANCE 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 REVO INSURANCE SPA 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 REVO INSURANCE i.e., REVO INSURANCE and ASML Holding go up and down completely randomly.
Pair Corralation between REVO INSURANCE and ASML Holding
Assuming the 90 days horizon REVO INSURANCE SPA is expected to generate 0.59 times more return on investment than ASML Holding. However, REVO INSURANCE SPA is 1.7 times less risky than ASML Holding. It trades about 0.09 of its potential returns per unit of risk. ASML Holding NV is currently generating about 0.05 per unit of risk. If you would invest 770.00 in REVO INSURANCE SPA on October 25, 2024 and sell it today you would earn a total of 385.00 from holding REVO INSURANCE SPA or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
REVO INSURANCE SPA vs. ASML Holding NV
Performance |
| Timeline |
| REVO INSURANCE SPA |
| ASML Holding NV |
REVO INSURANCE and ASML Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REVO INSURANCE and ASML Holding
The main advantage of trading using opposite REVO INSURANCE and ASML Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REVO INSURANCE 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.| REVO INSURANCE vs. Kingdee International Software | REVO INSURANCE vs. CyberArk Software | REVO INSURANCE vs. WIMFARM SA EO | REVO INSURANCE vs. Check Point Software |
| ASML Holding vs. Sun Life Financial | ASML Holding vs. REVO INSURANCE SPA | ASML Holding vs. BANK OF CHINA | ASML Holding vs. REINET INVESTMENTS SCA |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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