Correlation Between ASML Holding and Stratasys
Can any of the company-specific risk be diversified away by investing in both ASML Holding and Stratasys 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 Stratasys 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 Stratasys, you can compare the effects of market volatilities on ASML Holding and Stratasys 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 Stratasys. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASML Holding and Stratasys.
Diversification Opportunities for ASML Holding and Stratasys
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ASML and Stratasys is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and Stratasys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stratasys 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 Stratasys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stratasys has no effect on the direction of ASML Holding i.e., ASML Holding and Stratasys go up and down completely randomly.
Pair Corralation between ASML Holding and Stratasys
Given the investment horizon of 90 days ASML Holding NV is expected to generate 0.93 times more return on investment than Stratasys. However, ASML Holding NV is 1.08 times less risky than Stratasys. It trades about 0.06 of its potential returns per unit of risk. Stratasys is currently generating about -0.15 per unit of risk. If you would invest 95,776 in ASML Holding NV on March 14, 2024 and sell it today you would earn a total of 7,825 from holding ASML Holding NV or generate 8.17% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.41% |
Values | Daily Returns |
ASML Holding NV vs. Stratasys
Performance |
Timeline |
ASML Holding NV |
Stratasys |
ASML Holding and Stratasys Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ASML Holding and Stratasys
The main advantage of trading using opposite ASML Holding and Stratasys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASML Holding position performs unexpectedly, Stratasys 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 Stratasys will offset losses from the drop in Stratasys' long position.ASML Holding vs. Applied Materials | ASML Holding vs. KLA Tencor | ASML Holding vs. Axcelis Technologies | ASML Holding vs. Teradyne |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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