Correlation Between SPDR MSCI and ASML Holding
Can any of the company-specific risk be diversified away by investing in both SPDR 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 SPDR 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 SPDR MSCI World and ASML Holding NV, you can compare the effects of market volatilities on SPDR 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 SPDR MSCI with a short position of ASML Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR MSCI and ASML Holding.
Diversification Opportunities for SPDR MSCI and ASML Holding
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SPDR and ASML is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding SPDR 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 SPDR 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 SPDR 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 SPDR MSCI i.e., SPDR MSCI and ASML Holding go up and down completely randomly.
Pair Corralation between SPDR MSCI and ASML Holding
Assuming the 90 days trading horizon SPDR MSCI World is expected to generate 0.42 times more return on investment than ASML Holding. However, SPDR MSCI World is 2.39 times less risky than ASML Holding. It trades about 0.32 of its potential returns per unit of risk. ASML Holding NV is currently generating about 0.12 per unit of risk. If you would invest 6,447 in SPDR MSCI World on September 1, 2024 and sell it today you would earn a total of 498.00 from holding SPDR MSCI World or generate 7.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
SPDR MSCI World vs. ASML Holding NV
Performance |
| Timeline |
| SPDR MSCI World |
| ASML Holding NV |
SPDR MSCI and ASML Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR MSCI and ASML Holding
The main advantage of trading using opposite SPDR MSCI and ASML Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR 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.| SPDR MSCI vs. iShares Core MSCI | SPDR MSCI vs. BlackRock ESG Multi Asset | SPDR MSCI vs. Pershing Square Holdings | SPDR 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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