Correlation Between ASM International and Just Eat

Can any of the company-specific risk be diversified away by investing in both ASM International and Just Eat 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 ASM International and Just Eat into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ASM International NV and Just Eat Takeaway, you can compare the effects of market volatilities on ASM International and Just Eat 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 ASM International with a short position of Just Eat. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASM International and Just Eat.

Diversification Opportunities for ASM International and Just Eat

0.06

Correlation Coefficient

ASM International  Just Eat

Significant diversification

The 3 months correlation between ASM and Just is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding ASM International NV and Just Eat Takeaway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Just Eat Takeaway and ASM International 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 ASM International NV are associated (or correlated) with Just Eat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Just Eat Takeaway has no effect on the direction of ASM International i.e., ASM International and Just Eat go up and down completely randomly.

Pair Corralation between ASM International and Just Eat

Assuming the 90 days trading horizon ASM International is expected to generate 3.14 times less return on investment than Just Eat. But when comparing it to its historical volatility, ASM International NV is 1.37 times less risky than Just Eat. It trades about 0.03 of its potential returns per unit of risk. Just Eat Takeaway is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,263  in Just Eat Takeaway on September 20, 2024 and sell it today you would earn a total of  152.00  from holding Just Eat Takeaway or generate 12.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

ASM International NV  vs.  Just Eat Takeaway

ASM International

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ASM International NV are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable primary indicators, ASM International is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Just Eat Takeaway

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Just Eat Takeaway are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Just Eat unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ASM International and Just Eat

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

The idea behind ASM International NV and Just Eat Takeaway 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.