Correlation Between Everspin Technologies and ASML Holding
Can any of the company-specific risk be diversified away by investing in both Everspin Technologies 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 Everspin Technologies and ASML Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Everspin Technologies and ASML Holding NV, you can compare the effects of market volatilities on Everspin Technologies 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 Everspin Technologies with a short position of ASML Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Everspin Technologies and ASML Holding.
Diversification Opportunities for Everspin Technologies and ASML Holding
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Everspin and ASML is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Everspin Technologies 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 Everspin Technologies 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 Everspin Technologies 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 Everspin Technologies i.e., Everspin Technologies and ASML Holding go up and down completely randomly.
Pair Corralation between Everspin Technologies and ASML Holding
Given the investment horizon of 90 days Everspin Technologies is expected to generate 1.29 times less return on investment than ASML Holding. In addition to that, Everspin Technologies is 1.13 times more volatile than ASML Holding NV. It trades about 0.02 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 58,255 in ASML Holding NV on August 27, 2024 and sell it today you would earn a total of 9,033 from holding ASML Holding NV or generate 15.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Everspin Technologies vs. ASML Holding NV
Performance |
| Timeline |
| Everspin Technologies |
| ASML Holding NV |
Everspin Technologies and ASML Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Everspin Technologies and ASML Holding
The main advantage of trading using opposite Everspin Technologies and ASML Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Everspin Technologies 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.| Everspin Technologies vs. MACOM Technology Solutions | Everspin Technologies vs. Power Integrations | Everspin Technologies vs. Diodes Incorporated | Everspin Technologies vs. CEVA Inc |
| ASML Holding vs. Applied Materials | ASML Holding vs. KLA Tencor | ASML Holding vs. Axcelis Technologies | ASML Holding vs. Teradyne |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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