Correlation Between ASML Holding and Rambus

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

Diversification Opportunities for ASML Holding and Rambus

0.72

Correlation Coefficient

ASML Holding  Rambus

Poor diversification

The 3 months correlation between ASML and Rambus is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and Rambus Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rambus Inc 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 Rambus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rambus Inc has no effect on the direction of ASML Holding i.e., ASML Holding and Rambus go up and down completely randomly.

Pair Corralation between ASML Holding and Rambus

Given the investment horizon of 90 days ASML Holding is expected to generate 3.4 times less return on investment than Rambus. But when comparing it to its historical volatility, ASML Holding NV is 1.04 times less risky than Rambus. It trades about 0.06 of its potential returns per unit of risk. Rambus Inc is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  4,927  in Rambus Inc on April 29, 2025 and sell it today you would earn a total of  1,411  from holding Rambus Inc or generate 28.64% return on investment over 90 days.

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

ASML Holding NV  vs.  Rambus Inc

ASML Holding NV

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ASML Holding NV are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain primary indicators, ASML Holding may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Rambus Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Rambus Inc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental drivers, Rambus unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ASML Holding and Rambus

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

The idea behind ASML Holding NV and Rambus Inc 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.