Correlation Between Corporate Office and ASML HOLDING

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

By analyzing existing cross correlation between Corporate Office Properties and ASML HOLDING NY, you can compare the effects of market volatilities on Corporate Office 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 Corporate Office with a short position of ASML HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corporate Office and ASML HOLDING.

Diversification Opportunities for Corporate Office and ASML HOLDING

-0.65

Correlation Coefficient

Corporate Office  ASML HOLDING

Excellent diversification

The 3 months correlation between Corporate and ASML is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Corporate Office Properties and ASML HOLDING NY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASML HOLDING NY and Corporate Office 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 Corporate Office Properties 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 NY has no effect on the direction of Corporate Office i.e., Corporate Office and ASML HOLDING go up and down completely randomly.

Pair Corralation between Corporate Office and ASML HOLDING

Assuming the 90 days horizon Corporate Office Properties is expected to generate 0.72 times more return on investment than ASML HOLDING. However, Corporate Office Properties is 1.4 times less risky than ASML HOLDING. It trades about 0.32 of its potential returns per unit of risk. ASML HOLDING NY is currently generating about 0.1 per unit of risk. If you would invest  2,840  in Corporate Office Properties on September 15, 2024 and sell it today you would earn a total of  240.00  from holding Corporate Office Properties or generate 8.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.65%
Values	Daily Returns

Corporate Office Properties  vs.  ASML HOLDING NY

Corporate Office Pro

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Corporate Office Properties are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Corporate Office reported solid returns over the last few months and may actually be approaching a breakup point.

ASML HOLDING NY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ASML HOLDING NY has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, ASML HOLDING is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Corporate Office and ASML HOLDING

The main advantage of trading using opposite Corporate Office and ASML HOLDING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporate Office 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 Corporate Office Properties and ASML HOLDING 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.

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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.