Correlation Between LION ONE and ASML HOLDING
Can any of the company-specific risk be diversified away by investing in both LION ONE 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 LION ONE and ASML HOLDING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LION ONE METALS and ASML HOLDING NY, you can compare the effects of market volatilities on LION ONE 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 LION ONE with a short position of ASML HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of LION ONE and ASML HOLDING.
Diversification Opportunities for LION ONE and ASML HOLDING
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between LION and ASML is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding LION ONE METALS and ASML HOLDING NY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASML HOLDING NY and LION ONE 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 LION ONE METALS 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 NY has no effect on the direction of LION ONE i.e., LION ONE and ASML HOLDING go up and down completely randomly.
Pair Corralation between LION ONE and ASML HOLDING
Assuming the 90 days trading horizon LION ONE METALS is expected to under-perform the ASML HOLDING. In addition to that, LION ONE is 1.67 times more volatile than ASML HOLDING NY. It trades about -0.08 of its total potential returns per unit of risk. ASML HOLDING NY is currently generating about 0.02 per unit of volatility. If you would invest 64,834 in ASML HOLDING NY on September 4, 2024 and sell it today you would earn a total of 766.00 from holding ASML HOLDING NY or generate 1.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LION ONE METALS vs. ASML HOLDING NY
Performance |
| Timeline |
| LION ONE METALS |
| ASML HOLDING NY |
LION ONE and ASML HOLDING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LION ONE and ASML HOLDING
The main advantage of trading using opposite LION ONE and ASML HOLDING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LION ONE 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.The idea behind LION ONE METALS and ASML HOLDING NY pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| ASML HOLDING vs. National Beverage Corp | ASML HOLDING vs. Astral Foods Limited | ASML HOLDING vs. COFCO Joycome Foods | ASML HOLDING vs. PREMIER FOODS |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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