Correlation Between ASML Holding and NedSense Enterprises

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

Diversification Opportunities for ASML Holding and NedSense Enterprises

0.53

Correlation Coefficient

ASML Holding  NedSense Enterprises

Very weak diversification

The 3 months correlation between ASML and NedSense is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and NedSense Enterprises NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NedSense Enterprises 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 NedSense Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NedSense Enterprises has no effect on the direction of ASML Holding i.e., ASML Holding and NedSense Enterprises go up and down completely randomly.

Pair Corralation between ASML Holding and NedSense Enterprises

Assuming the 90 days trading horizon ASML Holding is expected to generate 3.69 times less return on investment than NedSense Enterprises. But when comparing it to its historical volatility, ASML Holding NV is 1.35 times less risky than NedSense Enterprises. It trades about 0.09 of its potential returns per unit of risk. NedSense Enterprises NV is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  5.80  in NedSense Enterprises NV on April 21, 2025 and sell it today you would earn a total of  3.70  from holding NedSense Enterprises NV or generate 63.79% return on investment over 90 days.

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

ASML Holding NV  vs.  NedSense Enterprises 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 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.

NedSense Enterprises

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in NedSense Enterprises NV are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, NedSense Enterprises sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ASML Holding and NedSense Enterprises

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

The idea behind ASML Holding NV and NedSense Enterprises 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.