Correlation Between ASML Holding and Radware

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

Diversification Opportunities for ASML Holding and Radware

-0.4

Correlation Coefficient

ASML Holding  Radware

Very good diversification

The 3 months correlation between ASML and Radware is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and Radware in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radware 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 Radware. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Radware has no effect on the direction of ASML Holding i.e., ASML Holding and Radware go up and down completely randomly.

Pair Corralation between ASML Holding and Radware

Given the investment horizon of 90 days ASML Holding NV is expected to generate 1.22 times more return on investment than Radware. However, ASML Holding is 1.22 times more volatile than Radware. It trades about 0.12 of its potential returns per unit of risk. Radware is currently generating about -0.11 per unit of risk. If you would invest  92,616  in ASML Holding NV on September 18, 2025 and sell it today you would earn a total of  14,989  from holding ASML Holding NV or generate 16.18% return on investment over 90 days.

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

ASML Holding NV  vs.  Radware

ASML Holding NV

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in ASML Holding NV are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady primary indicators, ASML Holding disclosed solid returns over the last few months and may actually be approaching a breakup point.

Radware

Risk-Adjusted Performance

Weakest

Over the last 90 days Radware has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest uncertain performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with ASML Holding and Radware

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

The idea behind ASML Holding NV and Radware 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 Managers module to screen money managers from public funds and ETFs managed around the world.