Correlation Between ASML Holding and Samsung Electronics

Can any of the company-specific risk be diversified away by investing in both ASML Holding and Samsung Electronics 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 Samsung Electronics 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 Samsung Electronics Co, you can compare the effects of market volatilities on ASML Holding and Samsung Electronics 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 Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASML Holding and Samsung Electronics.

Diversification Opportunities for ASML Holding and Samsung Electronics

0.68

Correlation Coefficient

ASML Holding  Samsung Electronics

Poor diversification

The 3 months correlation between ASML and Samsung is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics 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 Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of ASML Holding i.e., ASML Holding and Samsung Electronics go up and down completely randomly.

Pair Corralation between ASML Holding and Samsung Electronics

Assuming the 90 days trading horizon ASML Holding is expected to generate 1.39 times less return on investment than Samsung Electronics. In addition to that, ASML Holding is 1.04 times more volatile than Samsung Electronics Co. It trades about 0.11 of its total potential returns per unit of risk. Samsung Electronics Co is currently generating about 0.15 per unit of volatility. If you would invest  70,000  in Samsung Electronics Co on April 20, 2025 and sell it today you would earn a total of  13,400  from holding Samsung Electronics Co or generate 19.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

ASML Holding NV  vs.  Samsung Electronics Co

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 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, ASML Holding exhibited solid returns over the last few months and may actually be approaching a breakup point.

Samsung Electronics

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Samsung Electronics Co are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting basic indicators, Samsung Electronics reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ASML Holding and Samsung Electronics

The main advantage of trading using opposite ASML Holding and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASML Holding position performs unexpectedly, Samsung Electronics 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 Samsung Electronics will offset losses from the drop in Samsung Electronics' long position.

The idea behind ASML Holding NV and Samsung Electronics Co 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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.