Correlation Between Ascendis Pharma and Agilent Technologies
Can any of the company-specific risk be diversified away by investing in both Ascendis Pharma and Agilent Technologies 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 Ascendis Pharma and Agilent Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ascendis Pharma AS and Agilent Technologies, you can compare the effects of market volatilities on Ascendis Pharma and Agilent Technologies 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 Ascendis Pharma with a short position of Agilent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ascendis Pharma and Agilent Technologies.
Diversification Opportunities for Ascendis Pharma and Agilent Technologies
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ascendis and Agilent is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Ascendis Pharma AS and Agilent Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilent Technologies and Ascendis Pharma 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 Ascendis Pharma AS are associated (or correlated) with Agilent Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agilent Technologies has no effect on the direction of Ascendis Pharma i.e., Ascendis Pharma and Agilent Technologies go up and down completely randomly.
Pair Corralation between Ascendis Pharma and Agilent Technologies
Assuming the 90 days trading horizon Ascendis Pharma is expected to generate 1.05 times less return on investment than Agilent Technologies. In addition to that, Ascendis Pharma is 1.79 times more volatile than Agilent Technologies. It trades about 0.05 of its total potential returns per unit of risk. Agilent Technologies is currently generating about 0.1 per unit of volatility. If you would invest 34,564 in Agilent Technologies on September 1, 2024 and sell it today you would earn a total of 5,723 from holding Agilent Technologies or generate 16.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
Ascendis Pharma AS vs. Agilent Technologies
Performance |
| Timeline |
| Ascendis Pharma AS |
| Agilent Technologies |
Ascendis Pharma and Agilent Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ascendis Pharma and Agilent Technologies
The main advantage of trading using opposite Ascendis Pharma and Agilent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ascendis Pharma position performs unexpectedly, Agilent Technologies 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 Agilent Technologies will offset losses from the drop in Agilent Technologies' long position.| Ascendis Pharma vs. Raytheon Technologies | Ascendis Pharma vs. Bemobi Mobile Tech | Ascendis Pharma vs. Uber Technologies | Ascendis Pharma vs. Marvell Technology |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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