Correlation Between ASML Holding and State Trading

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

Diversification Opportunities for ASML Holding and State Trading

0.48

Correlation Coefficient

ASML Holding  State Trading

Very weak diversification

The 3 months correlation between ASML and State is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and The State Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Trading 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 State Trading. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Trading has no effect on the direction of ASML Holding i.e., ASML Holding and State Trading go up and down completely randomly.

Pair Corralation between ASML Holding and State Trading

Given the investment horizon of 90 days ASML Holding NV is expected to generate 0.78 times more return on investment than State Trading. However, ASML Holding NV is 1.29 times less risky than State Trading. It trades about 0.01 of its potential returns per unit of risk. The State Trading is currently generating about -0.07 per unit of risk. If you would invest  75,488  in ASML Holding NV on May 26, 2025 and sell it today you would earn a total of  1.00  from holding ASML Holding NV or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.92%
Values	Daily Returns

ASML Holding NV  vs.  The State Trading

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.

State Trading

Risk-Adjusted Performance

Weakest

Over the last 90 days The State Trading has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with ASML Holding and State Trading

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

The idea behind ASML Holding NV and The State Trading 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.