Correlation Between IShares MSCI and ASML Holding
Can any of the company-specific risk be diversified away by investing in both IShares MSCI 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 IShares MSCI and ASML Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares MSCI World and ASML Holding NV, you can compare the effects of market volatilities on IShares MSCI 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 IShares MSCI with a short position of ASML Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and ASML Holding.
Diversification Opportunities for IShares MSCI and ASML Holding
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and ASML is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI World 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 IShares MSCI 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 iShares MSCI World 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 IShares MSCI i.e., IShares MSCI and ASML Holding go up and down completely randomly.
Pair Corralation between IShares MSCI and ASML Holding
Assuming the 90 days trading horizon iShares MSCI World is expected to under-perform the ASML Holding. But the etf apears to be less risky and, when comparing its historical volatility, iShares MSCI World is 3.6 times less risky than ASML Holding. The etf trades about -0.01 of its potential returns per unit of risk. The ASML Holding NV is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 62,710 in ASML Holding NV on September 2, 2024 and sell it today you would earn a total of 3,130 from holding ASML Holding NV or generate 4.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares MSCI World vs. ASML Holding NV
Performance |
| Timeline |
| iShares MSCI World |
| ASML Holding NV |
IShares MSCI and ASML Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and ASML Holding
The main advantage of trading using opposite IShares MSCI and ASML Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI 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.| IShares MSCI vs. iShares Core MSCI | IShares MSCI vs. BlackRock ESG Multi Asset | IShares MSCI vs. Pershing Square Holdings | IShares MSCI vs. ASML Holding NV |
| 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 Stocks Directory module to find actively traded stocks across global markets.
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