Correlation Between ASML Holding and First Graphene

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

Diversification Opportunities for ASML Holding and First Graphene

-0.74

Correlation Coefficient

ASML Holding  First Graphene

Pay attention - limited upside

The 3 months correlation between ASML and First is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding ASML Holding NV and First Graphene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Graphene 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 First Graphene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Graphene has no effect on the direction of ASML Holding i.e., ASML Holding and First Graphene go up and down completely randomly.

Pair Corralation between ASML Holding and First Graphene

Assuming the 90 days horizon ASML Holding NV is expected to generate 0.18 times more return on investment than First Graphene. However, ASML Holding NV is 5.58 times less risky than First Graphene. It trades about 0.06 of its potential returns per unit of risk. First Graphene is currently generating about -0.01 per unit of risk. If you would invest  67,333  in ASML Holding NV on April 25, 2025 and sell it today you would earn a total of  4,317  from holding ASML Holding NV or generate 6.41% return on investment over 90 days.

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

ASML Holding NV  vs.  First Graphene

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 nearly weak essential indicators, ASML Holding may actually be approaching a critical reversion point that can send shares even higher in August 2025.

First Graphene

Risk-Adjusted Performance

Very Weak

Over the last 90 days First Graphene has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, First Graphene is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with ASML Holding and First Graphene

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

The idea behind ASML Holding NV and First Graphene 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.