Correlation Between Koninklijke Philips and ASML Holding
Can any of the company-specific risk be diversified away by investing in both Koninklijke Philips 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 Koninklijke Philips and ASML Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Koninklijke Philips NV and ASML Holding NV, you can compare the effects of market volatilities on Koninklijke Philips 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 Koninklijke Philips with a short position of ASML Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koninklijke Philips and ASML Holding.
Diversification Opportunities for Koninklijke Philips and ASML Holding
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Koninklijke and ASML is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Koninklijke Philips 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 Koninklijke Philips 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 Koninklijke Philips 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 Koninklijke Philips i.e., Koninklijke Philips and ASML Holding go up and down completely randomly.
Pair Corralation between Koninklijke Philips and ASML Holding
Assuming the 90 days trading horizon Koninklijke Philips NV is expected to under-perform the ASML Holding. In addition to that, Koninklijke Philips is 1.65 times more volatile than ASML Holding NV. It trades about -0.17 of its total potential returns per unit of risk. ASML Holding NV is currently generating about -0.06 per unit of volatility. If you would invest 65,727 in ASML Holding NV on August 24, 2024 and sell it today you would lose (2,577) from holding ASML Holding NV or give up 3.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Koninklijke Philips NV vs. ASML Holding NV
Performance |
| Timeline |
| Koninklijke Philips |
| ASML Holding NV |
Koninklijke Philips and ASML Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koninklijke Philips and ASML Holding
The main advantage of trading using opposite Koninklijke Philips and ASML Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koninklijke Philips 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.| Koninklijke Philips vs. Unilever PLC | Koninklijke Philips vs. ING Groep NV | Koninklijke Philips vs. Aegon NV | Koninklijke Philips vs. Koninklijke Ahold Delhaize |
| ASML Holding vs. Adyen NV | ASML Holding vs. Prosus NV | ASML Holding vs. Koninklijke Philips NV | ASML Holding vs. Koninklijke Ahold Delhaize |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |