# Correlation Between Broadridge Financial and ASML Holding

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Can any of the company-specific risk be diversified away by investing in both Broadridge Financial 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 Broadridge Financial and ASML Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Broadridge Financial Solutions and ASML Holding NV, you can compare the effects of market volatilities on Broadridge Financial 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 Broadridge Financial with a short position of ASML Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Broadridge Financial and ASML Holding.

## Diversification Opportunities for Broadridge Financial and ASML Holding

 0.52 Correlation Coefficient

### Very weak diversification

The 3 months correlation between Broadridge and ASML is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Broadridge Financial Solutions 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 Broadridge Financial 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 Broadridge Financial Solutions 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 Broadridge Financial i.e., Broadridge Financial and ASML Holding go up and down completely randomly.

## Pair Corralation between Broadridge Financial and ASML Holding

Allowing for the 90-day total investment horizon Broadridge Financial is expected to generate 2.59 times less return on investment than ASML Holding. But when comparing it to its historical volatility, Broadridge Financial Solutions is 1.47 times less risky than ASML Holding. It trades about 0.05 of its potential returns per unit of risk. ASML Holding NV is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  59,004  in ASML Holding NV on March 6, 2023 and sell it today you would earn a total of  13,461  from holding ASML Holding NV or generate 22.81% return on investment over 90 days.
 Time Period 3 Months [change] Direction Moves Together Strength Weak Accuracy 100.0% Values Daily Returns

## Broadridge Financial Solutions  vs.  ASML Holding NV

 Performance (%)
 Timeline

### 6 of 100

Compared to the overall equity markets, risk-adjusted returns on investments in Broadridge Financial Solutions are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, Broadridge Financial may actually be approaching a critical reversion point that can send shares even higher in July 2023.
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 ASML Holding NV Correlation Profile

### 10 of 100

Compared to the overall equity markets, risk-adjusted returns on investments in ASML Holding NV are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite abnormal primary indicators, ASML Holding disclosed solid returns over the last few months and may actually be approaching a breakup point.
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## Broadridge Financial and ASML Holding Volatility Contrast

 Predicted Return Density
 Returns