Correlation Between ASML Holding and GDI Integrated
Can any of the company-specific risk be diversified away by investing in both ASML Holding and GDI Integrated 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 ASML Holding and GDI Integrated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASML Holding NV and GDI Integrated, you can compare the effects of market volatilities on ASML Holding and GDI Integrated 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 ASML Holding with a short position of GDI Integrated. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASML Holding and GDI Integrated.
Diversification Opportunities for ASML Holding and GDI Integrated
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ASML and GDI is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and GDI Integrated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GDI Integrated and ASML Holding 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 ASML Holding NV are associated (or correlated) with GDI Integrated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GDI Integrated has no effect on the direction of ASML Holding i.e., ASML Holding and GDI Integrated go up and down completely randomly.
Pair Corralation between ASML Holding and GDI Integrated
Assuming the 90 days trading horizon ASML Holding NV is expected to under-perform the GDI Integrated. In addition to that, ASML Holding is 1.78 times more volatile than GDI Integrated. It trades about -0.22 of its total potential returns per unit of risk. GDI Integrated is currently generating about -0.15 per unit of volatility. If you would invest 3,890 in GDI Integrated on January 25, 2024 and sell it today you would lose (135.00) from holding GDI Integrated or give up 3.47% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 95.45% |
Values | Daily Returns |
ASML Holding NV vs. GDI Integrated
Performance |
Timeline |
ASML Holding NV |
GDI Integrated |
ASML Holding and GDI Integrated Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ASML Holding and GDI Integrated
The main advantage of trading using opposite ASML Holding and GDI Integrated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASML Holding position performs unexpectedly, GDI Integrated 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 GDI Integrated will offset losses from the drop in GDI Integrated's long position.ASML Holding vs. NX Filtration Holding | ASML Holding vs. BenevolentAI SA | ASML Holding vs. NedSense Enterprises NV | ASML Holding vs. Bever Holding NV |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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