Correlation Between ASML Holding and NVIDIA

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

Diversification Opportunities for ASML Holding and NVIDIA

-0.34

Correlation Coefficient

ASML Holding  NVIDIA

Very good diversification

The 3 months correlation between ASML and NVIDIA is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and NVIDIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NVIDIA 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 NVIDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NVIDIA has no effect on the direction of ASML Holding i.e., ASML Holding and NVIDIA go up and down completely randomly.

Pair Corralation between ASML Holding and NVIDIA

Given the investment horizon of 90 days ASML Holding is expected to generate 23.93 times less return on investment than NVIDIA. In addition to that, ASML Holding is 1.17 times more volatile than NVIDIA. It trades about 0.01 of its total potential returns per unit of risk. NVIDIA is currently generating about 0.27 per unit of volatility. If you would invest  13,549  in NVIDIA on May 27, 2025 and sell it today you would earn a total of  4,250  from holding NVIDIA or generate 31.37% return on investment over 90 days.

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

ASML Holding NV  vs.  NVIDIA

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.

NVIDIA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in NVIDIA are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady fundamental indicators, NVIDIA sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ASML Holding and NVIDIA

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

The idea behind ASML Holding NV and NVIDIA 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.