Correlation Between ASML Holding and ITTEFAQ Iron

Can any of the company-specific risk be diversified away by investing in both ASML Holding and ITTEFAQ Iron 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 ITTEFAQ Iron 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 ITTEFAQ Iron Industries, you can compare the effects of market volatilities on ASML Holding and ITTEFAQ Iron 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 ITTEFAQ Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASML Holding and ITTEFAQ Iron.

Diversification Opportunities for ASML Holding and ITTEFAQ Iron

-0.17

Correlation Coefficient

ASML Holding  ITTEFAQ Iron

Good diversification

The 3 months correlation between ASML and ITTEFAQ is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and ITTEFAQ Iron Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITTEFAQ Iron Industries 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 ITTEFAQ Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITTEFAQ Iron Industries has no effect on the direction of ASML Holding i.e., ASML Holding and ITTEFAQ Iron go up and down completely randomly.

Pair Corralation between ASML Holding and ITTEFAQ Iron

Given the investment horizon of 90 days ASML Holding is expected to generate 17.23 times less return on investment than ITTEFAQ Iron. But when comparing it to its historical volatility, ASML Holding NV is 1.4 times less risky than ITTEFAQ Iron. It trades about 0.01 of its potential returns per unit of risk. ITTEFAQ Iron Industries is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  748.00  in ITTEFAQ Iron Industries on May 25, 2025 and sell it today you would earn a total of  145.00  from holding ITTEFAQ Iron Industries or generate 19.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

ASML Holding NV  vs.  ITTEFAQ Iron Industries

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.

ITTEFAQ Iron Industries

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in ITTEFAQ Iron Industries are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting technical and fundamental indicators, ITTEFAQ Iron reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ASML Holding and ITTEFAQ Iron

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

The idea behind ASML Holding NV and ITTEFAQ Iron Industries 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.