Correlation Between SEKISUI CHEMICAL and ASML Holding
Can any of the company-specific risk be diversified away by investing in both SEKISUI CHEMICAL 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 SEKISUI CHEMICAL and ASML Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEKISUI CHEMICAL and ASML Holding NV, you can compare the effects of market volatilities on SEKISUI CHEMICAL 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 SEKISUI CHEMICAL with a short position of ASML Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEKISUI CHEMICAL and ASML Holding.
Diversification Opportunities for SEKISUI CHEMICAL and ASML Holding
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between SEKISUI and ASML is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding SEKISUI CHEMICAL 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 SEKISUI CHEMICAL 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 SEKISUI CHEMICAL 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 SEKISUI CHEMICAL i.e., SEKISUI CHEMICAL and ASML Holding go up and down completely randomly.
Pair Corralation between SEKISUI CHEMICAL and ASML Holding
Assuming the 90 days trading horizon SEKISUI CHEMICAL is expected to generate 1.31 times less return on investment than ASML Holding. But when comparing it to its historical volatility, SEKISUI CHEMICAL is 1.65 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 0.02 of returns per unit of risk over similar time horizon. If you would invest 56,869 in ASML Holding NV on September 4, 2024 and sell it today you would earn a total of 8,321 from holding ASML Holding NV or generate 14.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEKISUI CHEMICAL vs. ASML Holding NV
Performance |
| Timeline |
| SEKISUI CHEMICAL |
| ASML Holding NV |
SEKISUI CHEMICAL and ASML Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEKISUI CHEMICAL and ASML Holding
The main advantage of trading using opposite SEKISUI CHEMICAL and ASML Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEKISUI CHEMICAL 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.| SEKISUI CHEMICAL vs. Perseus Mining Limited | SEKISUI CHEMICAL vs. United Internet AG | SEKISUI CHEMICAL vs. INTERSHOP Communications Aktiengesellschaft | SEKISUI CHEMICAL vs. Charter Communications |
| ASML Holding vs. Canadian Utilities Limited | ASML Holding vs. CODERE ONLINE LUX | ASML Holding vs. Entravision Communications | ASML Holding vs. Iridium Communications |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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