Correlation Between ASML Holding and Midcap Fund

Can any of the company-specific risk be diversified away by investing in both ASML Holding and Midcap Fund 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 Midcap Fund 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 Midcap Fund R 5, you can compare the effects of market volatilities on ASML Holding and Midcap Fund 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 Midcap Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASML Holding and Midcap Fund.

Diversification Opportunities for ASML Holding and Midcap Fund

-0.25

Correlation Coefficient

ASML Holding  Midcap Fund

Very good diversification

The 3 months correlation between ASML and Midcap is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and Midcap Fund R 5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midcap Fund R 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 Midcap Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midcap Fund R has no effect on the direction of ASML Holding i.e., ASML Holding and Midcap Fund go up and down completely randomly.

Pair Corralation between ASML Holding and Midcap Fund

Given the investment horizon of 90 days ASML Holding is expected to generate 4.52 times less return on investment than Midcap Fund. In addition to that, ASML Holding is 2.6 times more volatile than Midcap Fund R 5. It trades about 0.01 of its total potential returns per unit of risk. Midcap Fund R 5 is currently generating about 0.11 per unit of volatility. If you would invest  4,447  in Midcap Fund R 5 on May 25, 2025 and sell it today you would earn a total of  239.00  from holding Midcap Fund R 5 or generate 5.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

ASML Holding NV  vs.  Midcap Fund R 5

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.

Midcap Fund R

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Midcap Fund R 5 are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Midcap Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ASML Holding and Midcap Fund

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

The idea behind ASML Holding NV and Midcap Fund R 5 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.