Correlation Between Lumen Technologies, and ASML Holding
Can any of the company-specific risk be diversified away by investing in both Lumen Technologies, 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 Lumen Technologies, and ASML Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lumen Technologies, and ASML Holding NV, you can compare the effects of market volatilities on Lumen Technologies, 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 Lumen Technologies, with a short position of ASML Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumen Technologies, and ASML Holding.
Diversification Opportunities for Lumen Technologies, and ASML Holding
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lumen and ASML is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Lumen Technologies, 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 Lumen Technologies, 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 Lumen Technologies, 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 Lumen Technologies, i.e., Lumen Technologies, and ASML Holding go up and down completely randomly.
Pair Corralation between Lumen Technologies, and ASML Holding
Assuming the 90 days trading horizon Lumen Technologies, is expected to generate 1.87 times more return on investment than ASML Holding. However, Lumen Technologies, is 1.87 times more volatile than ASML Holding NV. It trades about 0.13 of its potential returns per unit of risk. ASML Holding NV is currently generating about 0.04 per unit of risk. If you would invest 1,912 in Lumen Technologies, on April 25, 2025 and sell it today you would earn a total of 588.00 from holding Lumen Technologies, or generate 30.75% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Lumen Technologies, vs. ASML Holding NV
Performance |
Timeline |
Lumen Technologies, |
ASML Holding NV |
Lumen Technologies, and ASML Holding Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lumen Technologies, and ASML Holding
The main advantage of trading using opposite Lumen Technologies, and ASML Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lumen Technologies, 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.Lumen Technologies, vs. T Mobile | Lumen Technologies, vs. Verizon Communications | Lumen Technologies, vs. Vodafone Group Public | Lumen Technologies, vs. ATT Inc |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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