Correlation Between ASML Holding and PostNL NV
Can any of the company-specific risk be diversified away by investing in both ASML Holding and PostNL NV 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 PostNL NV 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 PostNL NV, you can compare the effects of market volatilities on ASML Holding and PostNL NV 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 PostNL NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASML Holding and PostNL NV.
Diversification Opportunities for ASML Holding and PostNL NV
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ASML and PostNL is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and PostNL NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PostNL 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 PostNL NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PostNL NV has no effect on the direction of ASML Holding i.e., ASML Holding and PostNL NV go up and down completely randomly.
Pair Corralation between ASML Holding and PostNL NV
Assuming the 90 days trading horizon ASML Holding NV is expected to under-perform the PostNL NV. But the stock apears to be less risky and, when comparing its historical volatility, ASML Holding NV is 1.18 times less risky than PostNL NV. The stock trades about -0.16 of its potential returns per unit of risk. The PostNL NV is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 124.00 in PostNL NV on February 5, 2024 and sell it today you would earn a total of 0.00 from holding PostNL NV or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
ASML Holding NV vs. PostNL NV
Performance |
Timeline |
ASML Holding NV |
PostNL NV |
ASML Holding and PostNL NV Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ASML Holding and PostNL NV
The main advantage of trading using opposite ASML Holding and PostNL NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASML Holding position performs unexpectedly, PostNL NV 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 PostNL NV will offset losses from the drop in PostNL NV's long position.ASML Holding vs. ASM International NV | ASML Holding vs. ASR Nederland NV | ASML Holding vs. Koninklijke Ahold Delhaize | ASML Holding vs. NN Group NV |
PostNL NV vs. Koninklijke Ahold Delhaize | PostNL NV vs. Bpost NV | PostNL NV vs. Aegon NV | PostNL NV vs. Koninklijke KPN NV |
Check out your portfolio center.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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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