Correlation Between ASML Holding and CITIC

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

By analyzing existing cross correlation between ASML Holding NV and CITIC LTD ADR5, you can compare the effects of market volatilities on ASML Holding and CITIC 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 CITIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASML Holding and CITIC.

Diversification Opportunities for ASML Holding and CITIC

-0.39

Correlation Coefficient

ASML Holding  CITIC

Very good diversification

The 3 months correlation between ASML and CITIC is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and CITIC LTD ADR5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC LTD ADR5 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 NV are associated (or correlated) with CITIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIC LTD ADR5 has no effect on the direction of ASML Holding i.e., ASML Holding and CITIC go up and down completely randomly.

Pair Corralation between ASML Holding and CITIC

Given the investment horizon of 90 days ASML Holding is expected to generate 14.87 times less return on investment than CITIC. In addition to that, ASML Holding is 1.29 times more volatile than CITIC LTD ADR5. It trades about 0.01 of its total potential returns per unit of risk. CITIC LTD ADR5 is currently generating about 0.18 per unit of volatility. If you would invest  520.00  in CITIC LTD ADR5 on May 26, 2025 and sell it today you would earn a total of  100.00  from holding CITIC LTD ADR5 or generate 19.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

ASML Holding NV  vs.  CITIC LTD ADR5

ASML Holding NV

Risk-Adjusted Performance

Weakest

Over the last 90 days ASML Holding NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent primary indicators, ASML Holding is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

CITIC LTD ADR5

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CITIC LTD ADR5 are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, CITIC reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ASML Holding and CITIC

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

The idea behind ASML Holding NV and CITIC LTD ADR5 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.