Correlation Between Brigham Minerals and ASML Holding

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

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

Diversification Opportunities for Brigham Minerals and ASML Holding

-0.03

Correlation Coefficient

Brigham Minerals  ASML Holding

Good diversification

The 3 months correlation between Brigham and ASML is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Brigham Minerals 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 Brigham Minerals 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 Brigham Minerals 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 Brigham Minerals i.e., Brigham Minerals and ASML Holding go up and down completely randomly.

Pair Corralation between Brigham Minerals and ASML Holding

If you would invest  94,134  in ASML Holding NV on January 17, 2024 and sell it today you would earn a total of  1,348  from holding ASML Holding NV or generate 1.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Brigham Minerals  vs.  ASML Holding NV

Brigham Minerals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brigham Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Brigham Minerals is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

ASML Holding NV

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ASML Holding NV are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating primary indicators, ASML Holding disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Brigham Minerals and ASML Holding

The main advantage of trading using opposite Brigham Minerals and ASML Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brigham Minerals 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 Brigham Minerals 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.