Correlation Between ForFarmers and ASML Holding
Can any of the company-specific risk be diversified away by investing in both ForFarmers and ASML Holding 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 ForFarmers and ASML Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ForFarmers NV and ASML Holding NV, you can compare the effects of market volatilities on ForFarmers and ASML Holding 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 ForFarmers with a short position of ASML Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of ForFarmers and ASML Holding.
Diversification Opportunities for ForFarmers and ASML Holding
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ForFarmers and ASML is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding ForFarmers NV and ASML Holding NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASML Holding NV and ForFarmers 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 ForFarmers NV are associated (or correlated) with ASML Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASML Holding NV has no effect on the direction of ForFarmers i.e., ForFarmers and ASML Holding go up and down completely randomly.
Pair Corralation between ForFarmers and ASML Holding
Assuming the 90 days trading horizon ForFarmers NV is expected to generate 0.45 times more return on investment than ASML Holding. However, ForFarmers NV is 2.2 times less risky than ASML Holding. It trades about 0.09 of its potential returns per unit of risk. ASML Holding NV is currently generating about -0.02 per unit of risk. If you would invest 317.00 in ForFarmers NV on September 12, 2024 and sell it today you would earn a total of 23.00 from holding ForFarmers NV or generate 7.26% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
ForFarmers NV vs. ASML Holding NV
Performance |
Timeline |
ForFarmers NV |
ASML Holding NV |
ForFarmers and ASML Holding Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ForFarmers and ASML Holding
The main advantage of trading using opposite ForFarmers and ASML Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ForFarmers position performs unexpectedly, ASML Holding 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 ASML Holding will offset losses from the drop in ASML Holding's long position.ForFarmers vs. Koninklijke Heijmans NV | ForFarmers vs. Amsterdam Commodities NV | ForFarmers vs. Flow Traders BV | ForFarmers vs. Koninklijke BAM Groep |
ASML Holding vs. Adyen NV | ASML Holding vs. Prosus NV | ASML Holding vs. Koninklijke Philips NV | ASML Holding vs. Koninklijke Ahold Delhaize |
Check out your portfolio center.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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories |