Correlation Between ASML Holding and ETC 6

Can any of the company-specific risk be diversified away by investing in both ASML Holding and ETC 6 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 ETC 6 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 ETC 6 Meridian, you can compare the effects of market volatilities on ASML Holding and ETC 6 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 ETC 6. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASML Holding and ETC 6.

Diversification Opportunities for ASML Holding and ETC 6

-0.16

Correlation Coefficient

ASML Holding  ETC 6

Good diversification

The 3 months correlation between ASML and ETC is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and ETC 6 Meridian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETC 6 Meridian 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 ETC 6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETC 6 Meridian has no effect on the direction of ASML Holding i.e., ASML Holding and ETC 6 go up and down completely randomly.

Pair Corralation between ASML Holding and ETC 6

Given the investment horizon of 90 days ASML Holding is expected to generate 2.97 times less return on investment than ETC 6. In addition to that, ASML Holding is 5.62 times more volatile than ETC 6 Meridian. It trades about 0.01 of its total potential returns per unit of risk. ETC 6 Meridian is currently generating about 0.16 per unit of volatility. If you would invest  3,800  in ETC 6 Meridian on May 26, 2025 and sell it today you would earn a total of  134.00  from holding ETC 6 Meridian or generate 3.53% 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.  ETC 6 Meridian

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.

ETC 6 Meridian

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ETC 6 Meridian are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, ETC 6 is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with ASML Holding and ETC 6

The main advantage of trading using opposite ASML Holding and ETC 6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASML Holding position performs unexpectedly, ETC 6 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 ETC 6 will offset losses from the drop in ETC 6's long position.

The idea behind ASML Holding NV and ETC 6 Meridian 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.