Correlation Between Giga Tronics and ASML Holding

Can any of the company-specific risk be diversified away by investing in both Giga Tronics 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 Giga Tronics and ASML Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Giga tronics and ASML Holding NV, you can compare the effects of market volatilities on Giga Tronics 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 Giga Tronics with a short position of ASML Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Giga Tronics and ASML Holding.

Diversification Opportunities for Giga Tronics and ASML Holding

0.06

Correlation Coefficient

Giga Tronics  ASML Holding

Significant diversification

The 3 months correlation between Giga and ASML is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Giga tronics 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 Giga Tronics 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 Giga tronics 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 Giga Tronics i.e., Giga Tronics and ASML Holding go up and down completely randomly.

Pair Corralation between Giga Tronics and ASML Holding

If you would invest  86,646  in ASML Holding NV on January 26, 2024 and sell it today you would earn a total of  2,586  from holding ASML Holding NV or generate 2.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

Giga tronics  vs.  ASML Holding NV

Giga tronics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Giga tronics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Giga Tronics is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

ASML Holding NV

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ASML Holding NV are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent primary indicators, ASML Holding is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Giga Tronics and ASML Holding

The main advantage of trading using opposite Giga Tronics and ASML Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Giga Tronics 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.

The idea behind Giga tronics and ASML Holding NV 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.

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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.