Correlation Between Aperam SA and ASML Holding

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

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

Diversification Opportunities for Aperam SA and ASML Holding

0.68

Correlation Coefficient

Aperam SA  ASML Holding

Poor diversification

The 3 months correlation between Aperam and ASML is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Aperam SA 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 Aperam SA 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 Aperam SA 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 Aperam SA i.e., Aperam SA and ASML Holding go up and down completely randomly.

Pair Corralation between Aperam SA and ASML Holding

Assuming the 90 days trading horizon Aperam SA is expected to generate 1.94 times less return on investment than ASML Holding. But when comparing it to its historical volatility, Aperam SA is 1.23 times less risky than ASML Holding. It trades about 0.06 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  55,936  in ASML Holding NV on April 21, 2025 and sell it today you would earn a total of  7,414  from holding ASML Holding NV or generate 13.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Aperam SA  vs.  ASML Holding NV

Aperam SA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aperam SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Aperam SA may actually be approaching a critical reversion point that can send shares even higher in August 2025.

ASML Holding NV

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ASML Holding NV are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, ASML Holding unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aperam SA and ASML Holding

The main advantage of trading using opposite Aperam SA and ASML Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aperam SA 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 Aperam SA 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.