Correlation Between Lasertec and ASM International
Can any of the company-specific risk be diversified away by investing in both Lasertec and ASM International 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 Lasertec and ASM International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lasertec and ASM International NV, you can compare the effects of market volatilities on Lasertec and ASM International 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 Lasertec with a short position of ASM International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lasertec and ASM International.
Diversification Opportunities for Lasertec and ASM International
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lasertec and ASM is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Lasertec and ASM International NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASM International and Lasertec 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 Lasertec are associated (or correlated) with ASM International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASM International has no effect on the direction of Lasertec i.e., Lasertec and ASM International go up and down completely randomly.
Pair Corralation between Lasertec and ASM International
Assuming the 90 days horizon Lasertec is expected to under-perform the ASM International. In addition to that, Lasertec is 1.27 times more volatile than ASM International NV. It trades about -0.2 of its total potential returns per unit of risk. ASM International NV is currently generating about -0.1 per unit of volatility. If you would invest 64,101 in ASM International NV on September 3, 2024 and sell it today you would lose (11,059) from holding ASM International NV or give up 17.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.46% |
| Values | Daily Returns |
Lasertec vs. ASM International NV
Performance |
| Timeline |
| Lasertec |
| ASM International |
Lasertec and ASM International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lasertec and ASM International
The main advantage of trading using opposite Lasertec and ASM International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lasertec position performs unexpectedly, ASM International 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 ASM International will offset losses from the drop in ASM International's long position.| Lasertec vs. Sumco Corp ADR | Lasertec vs. Asm Pacific Technology | Lasertec vs. Tokyo Electron | Lasertec vs. Advantest |
| ASM International vs. Lasertec | ASM International vs. Tokyo Electron | ASM International vs. Tokyo Electron Ltd | ASM International vs. BE Semiconductor Industries |
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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