Correlation Between Exor NV and ASM International

Can any of the company-specific risk be diversified away by investing in both Exor NV and ASM International 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 Exor NV and ASM International into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Exor NV and ASM International

0.35

Correlation Coefficient

Exor NV  ASM International

Weak diversification

The 3 months correlation between Exor and ASM is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Exor NV and ASM International NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASM International and Exor NV 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 Exor NV are associated (or correlated) with ASM International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASM International has no effect on the direction of Exor NV i.e., Exor NV and ASM International go up and down completely randomly.

Pair Corralation between Exor NV and ASM International

Assuming the 90 days trading horizon Exor NV is expected to generate 1.19 times less return on investment than ASM International. But when comparing it to its historical volatility, Exor NV is 3.03 times less risky than ASM International. It trades about 0.18 of its potential returns per unit of risk. ASM International NV is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  52,640  in ASM International NV on February 3, 2024 and sell it today you would earn a total of  5,540  from holding ASM International NV or generate 10.52% return on investment over 90 days.

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

Exor NV  vs.  ASM International NV

Exor NV

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Exor NV are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Exor NV may actually be approaching a critical reversion point that can send shares even higher in June 2024.

ASM International

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ASM International NV are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak primary indicators, ASM International unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Exor NV and ASM International

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

The idea behind Exor NV and ASM International 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.