Correlation Between Xtrackers ShortDAX and ASML Holding

Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and ASML Holding 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 Xtrackers ShortDAX and ASML Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Xtrackers ShortDAX and ASML Holding NV, you can compare the effects of market volatilities on Xtrackers ShortDAX and ASML Holding 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 Xtrackers ShortDAX with a short position of ASML Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and ASML Holding.

Diversification Opportunities for Xtrackers ShortDAX and ASML Holding

-0.73

Correlation Coefficient

Xtrackers ShortDAX  ASML Holding

Pay attention - limited upside

The 3 months correlation between Xtrackers and ASML is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and ASML Holding NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASML Holding NV and Xtrackers ShortDAX 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 Xtrackers ShortDAX are associated (or correlated) with ASML Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASML Holding NV has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and ASML Holding go up and down completely randomly.

Pair Corralation between Xtrackers ShortDAX and ASML Holding

Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the ASML Holding. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers ShortDAX is 1.17 times less risky than ASML Holding. The etf trades about -0.12 of its potential returns per unit of risk. The ASML Holding NV is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  58,920  in ASML Holding NV on April 25, 2025 and sell it today you would earn a total of  1,780  from holding ASML Holding NV or generate 3.02% return on investment over 90 days.

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

Xtrackers ShortDAX  vs.  ASML Holding NV

Xtrackers ShortDAX

Risk-Adjusted Performance

Very Weak

Over the last 90 days Xtrackers ShortDAX has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Etf's basic indicators remain nearly stable which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long-run up-swing for the Exchange Traded Fund stockholders.

ASML Holding NV

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ASML Holding NV are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, ASML Holding is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Xtrackers ShortDAX and ASML Holding

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

The idea behind Xtrackers ShortDAX and ASML Holding 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 Stocks Directory module to find actively traded stocks across global markets.