Correlation Between Penta Ocean and ASML Holding

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

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

Diversification Opportunities for Penta Ocean and ASML Holding

0.78

Correlation Coefficient

Penta Ocean  ASML Holding

Poor diversification

The 3 months correlation between Penta and ASML is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Penta Ocean Construction Co 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 Penta Ocean 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 Penta Ocean Construction Co 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 Penta Ocean i.e., Penta Ocean and ASML Holding go up and down completely randomly.

Pair Corralation between Penta Ocean and ASML Holding

Assuming the 90 days horizon Penta Ocean is expected to generate 1.3 times less return on investment than ASML Holding. But when comparing it to its historical volatility, Penta Ocean Construction Co is 1.07 times less risky than ASML Holding. It trades about 0.09 of its potential returns per unit of risk. ASML Holding NV is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  55,825  in ASML Holding NV on April 21, 2025 and sell it today you would earn a total of  7,775  from holding ASML Holding NV or generate 13.93% return on investment over 90 days.

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

Penta Ocean Construction Co  vs.  ASML Holding NV

Penta Ocean Construc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Penta Ocean Construction Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Penta Ocean may actually be approaching a critical reversion point that can send shares even higher in August 2025.

ASML Holding NV

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ASML Holding NV are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, ASML Holding reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Penta Ocean and ASML Holding

The main advantage of trading using opposite Penta Ocean and ASML Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penta Ocean 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 Penta Ocean Construction Co 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.