Correlation Between ASM INTERNATIONAL and Asml Holdings

By analyzing existing cross correlation between ASM INTERNATIONAL NV and Asml Holdings NY, you can compare the effects of market volatilities on ASM INTERNATIONAL and Asml Holdings 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 ASM INTERNATIONAL with a short position of Asml Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASM INTERNATIONAL and Asml Holdings.

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Can any of the company-specific risk be diversified away by investing in both ASM INTERNATIONAL and Asml Holdings 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 ASM INTERNATIONAL and Asml Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

Diversification Opportunities for ASM INTERNATIONAL and Asml Holdings

0.42
  Correlation Coefficient
ASM INTERNATIONAL
Asml Holdings NY

Very weak diversification

The 3 months correlation between ASMXF and Asml Holdings is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding ASM INTERNATIONAL NV and Asml Holdings NY in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Asml Holdings NY and ASM INTERNATIONAL 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 ASM INTERNATIONAL NV are associated (or correlated) with Asml Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asml Holdings NY has no effect on the direction of ASM INTERNATIONAL i.e., ASM INTERNATIONAL and Asml Holdings go up and down completely randomly.

Pair Corralation between ASM INTERNATIONAL and Asml Holdings

Assuming the 90 days horizon ASM INTERNATIONAL NV is expected to generate 2.42 times more return on investment than Asml Holdings. However, ASM INTERNATIONAL is 2.42 times more volatile than Asml Holdings NY. It trades about 0.1 of its potential returns per unit of risk. Asml Holdings NY is currently generating about 0.09 per unit of risk. If you would invest  14,507  in ASM INTERNATIONAL NV on September 5, 2021 and sell it today you would earn a total of  27,135  from holding ASM INTERNATIONAL NV or generate 187.05% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

ASM INTERNATIONAL NV  vs.  Asml Holdings NY

 Performance (%) 
      Timeline 
ASM INTERNATIONAL 
ASMXF Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in ASM INTERNATIONAL NV are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sluggish basic indicators, ASM INTERNATIONAL exhibited solid returns over the last few months and may actually be approaching a breakup point.

ASMXF Price Channel

Asml Holdings NY 
Asml Holdings Performance
0 of 100
Over the last 90 days Asml Holdings NY has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's primary indicators remain steady and the new chaos on Wall Street may also be a sign of medium-term gains for the company stakeholders.

Asml Holdings Price Channel

ASM INTERNATIONAL and Asml Holdings Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with ASM INTERNATIONAL and Asml Holdings

The main advantage of trading using opposite ASM INTERNATIONAL and Asml Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASM INTERNATIONAL position performs unexpectedly, Asml Holdings 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 Holdings will offset losses from the drop in Asml Holdings' long position.
The idea behind ASM INTERNATIONAL NV and Asml Holdings NY pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Asml Holdings NY

Pair trading matchups for Asml Holdings

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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.

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