Correlation Between ASML Holding and Akzo Nobel

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

Diversification Opportunities for ASML Holding and Akzo Nobel

0.64

Correlation Coefficient

ASML Holding  Akzo Nobel

Poor diversification

The 3 months correlation between ASML and Akzo is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and Akzo Nobel NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akzo Nobel NV 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 Akzo Nobel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akzo Nobel NV has no effect on the direction of ASML Holding i.e., ASML Holding and Akzo Nobel go up and down completely randomly.

Pair Corralation between ASML Holding and Akzo Nobel

Assuming the 90 days trading horizon ASML Holding is expected to generate 1.09 times less return on investment than Akzo Nobel. In addition to that, ASML Holding is 1.95 times more volatile than Akzo Nobel NV. It trades about 0.06 of its total potential returns per unit of risk. Akzo Nobel NV is currently generating about 0.13 per unit of volatility. If you would invest  5,394  in Akzo Nobel NV on April 23, 2025 and sell it today you would earn a total of  544.00  from holding Akzo Nobel NV or generate 10.09% return on investment over 90 days.

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

ASML Holding NV  vs.  Akzo Nobel NV

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 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, ASML Holding may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Akzo Nobel NV

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Akzo Nobel NV are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Akzo Nobel may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with ASML Holding and Akzo Nobel

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

The idea behind ASML Holding NV and Akzo Nobel 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.