Correlation Between ASML HOLDING and LBG MEDIA

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

By analyzing existing cross correlation between ASML HOLDING NY and LBG MEDIA PLC, you can compare the effects of market volatilities on ASML HOLDING and LBG MEDIA 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 ASML HOLDING with a short position of LBG MEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASML HOLDING and LBG MEDIA.

Diversification Opportunities for ASML HOLDING and LBG MEDIA

0.45

Correlation Coefficient

ASML HOLDING  LBG MEDIA

Very weak diversification

The 3 months correlation between ASML and LBG is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding ASML HOLDING NY and LBG MEDIA PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LBG MEDIA PLC and ASML HOLDING 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 ASML HOLDING NY are associated (or correlated) with LBG MEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LBG MEDIA PLC has no effect on the direction of ASML HOLDING i.e., ASML HOLDING and LBG MEDIA go up and down completely randomly.

Pair Corralation between ASML HOLDING and LBG MEDIA

Assuming the 90 days trading horizon ASML HOLDING NY is expected to under-perform the LBG MEDIA. But the stock apears to be less risky and, when comparing its historical volatility, ASML HOLDING NY is 1.16 times less risky than LBG MEDIA. The stock trades about 0.0 of its potential returns per unit of risk. The LBG MEDIA PLC is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  99.00  in LBG MEDIA PLC on May 28, 2025 and sell it today you would earn a total of  8.00  from holding LBG MEDIA PLC or generate 8.08% return on investment over 90 days.

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

ASML HOLDING NY  vs.  LBG MEDIA PLC

ASML HOLDING NY

Risk-Adjusted Performance

Weakest

Over the last 90 days ASML HOLDING NY has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, ASML HOLDING is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

LBG MEDIA PLC

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in LBG MEDIA PLC are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, LBG MEDIA may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with ASML HOLDING and LBG MEDIA

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

The idea behind ASML HOLDING NY and LBG MEDIA PLC 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.