Correlation Between Mitsui Chemicals and ASML Holding

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

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

Diversification Opportunities for Mitsui Chemicals and ASML Holding

-0.46

Correlation Coefficient

Mitsui Chemicals  ASML Holding

Very good diversification

The 3 months correlation between Mitsui and ASML is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Mitsui Chemicals ADR 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 Mitsui Chemicals 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 Mitsui Chemicals ADR 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 Mitsui Chemicals i.e., Mitsui Chemicals and ASML Holding go up and down completely randomly.

Pair Corralation between Mitsui Chemicals and ASML Holding

Assuming the 90 days horizon Mitsui Chemicals ADR is expected to under-perform the ASML Holding. But the pink sheet apears to be less risky and, when comparing its historical volatility, Mitsui Chemicals ADR is 2.42 times less risky than ASML Holding. The pink sheet trades about -0.15 of its potential returns per unit of risk. The ASML Holding NV is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  72,456  in ASML Holding NV on September 2, 2025 and sell it today you would earn a total of  33,544  from holding ASML Holding NV or generate 46.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Mitsui Chemicals ADR  vs.  ASML Holding NV

Mitsui Chemicals ADR

Risk-Adjusted Performance

Weakest

Over the last 90 days Mitsui Chemicals ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

ASML Holding NV

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ASML Holding NV are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite quite weak primary indicators, ASML Holding disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mitsui Chemicals and ASML Holding

The main advantage of trading using opposite Mitsui Chemicals and ASML Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsui Chemicals 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 Mitsui Chemicals ADR 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.