Correlation Between Sanyo Chemical and ASML Holding
Can any of the company-specific risk be diversified away by investing in both Sanyo 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 Sanyo 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 Sanyo Chemical Industries and ASML Holding NV, you can compare the effects of market volatilities on Sanyo 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 Sanyo Chemical with a short position of ASML Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanyo Chemical and ASML Holding.
Diversification Opportunities for Sanyo Chemical and ASML Holding
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sanyo and ASML is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Sanyo Chemical Industries 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 Sanyo 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 Sanyo Chemical Industries 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 Sanyo Chemical i.e., Sanyo Chemical and ASML Holding go up and down completely randomly.
Pair Corralation between Sanyo Chemical and ASML Holding
Assuming the 90 days horizon Sanyo Chemical Industries is expected to under-perform the ASML Holding. But the stock apears to be less risky and, when comparing its historical volatility, Sanyo Chemical Industries is 1.79 times less risky than ASML Holding. The stock trades about -0.02 of its potential returns per unit of risk. The 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 Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sanyo Chemical Industries vs. ASML Holding NV
Performance |
| Timeline |
| Sanyo Chemical Industries |
| ASML Holding NV |
Sanyo Chemical and ASML Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sanyo Chemical and ASML Holding
The main advantage of trading using opposite Sanyo Chemical and ASML Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanyo 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.| Sanyo Chemical vs. The Sherwin Williams | Sanyo Chemical vs. Dupont De Nemours | Sanyo Chemical vs. Superior Plus Corp | Sanyo Chemical vs. NMI Holdings |
| 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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