Correlation Between SCI Engineered and ASML Holding
Can any of the company-specific risk be diversified away by investing in both SCI Engineered 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 SCI Engineered and ASML Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCI Engineered Materials and ASML Holding NV, you can compare the effects of market volatilities on SCI Engineered 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 SCI Engineered with a short position of ASML Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCI Engineered and ASML Holding.
Diversification Opportunities for SCI Engineered and ASML Holding
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SCI and ASML is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding SCI Engineered Materials 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 SCI Engineered 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 SCI Engineered Materials 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 SCI Engineered i.e., SCI Engineered and ASML Holding go up and down completely randomly.
Pair Corralation between SCI Engineered and ASML Holding
Given the investment horizon of 90 days SCI Engineered Materials is expected to generate 0.92 times more return on investment than ASML Holding. However, SCI Engineered Materials is 1.08 times less risky than ASML Holding. It trades about 0.03 of its potential returns per unit of risk. ASML Holding NV is currently generating about 0.01 per unit of risk. If you would invest 446.00 in SCI Engineered Materials on August 26, 2024 and sell it today you would earn a total of 54.00 from holding SCI Engineered Materials or generate 12.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
SCI Engineered Materials vs. ASML Holding NV
Performance |
| Timeline |
| SCI Engineered Materials |
| ASML Holding NV |
SCI Engineered and ASML Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCI Engineered and ASML Holding
The main advantage of trading using opposite SCI Engineered and ASML Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCI Engineered 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.| SCI Engineered vs. ASML Holding NV | SCI Engineered vs. Applied Materials | SCI Engineered vs. Lam Research Corp | SCI Engineered vs. KLA Tencor |
| 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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