Correlation Between Ascendis Pharma and Metalurgica Gerdau
Can any of the company-specific risk be diversified away by investing in both Ascendis Pharma and Metalurgica Gerdau 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 Metalurgica Gerdau 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 Metalurgica Gerdau SA, you can compare the effects of market volatilities on Ascendis Pharma and Metalurgica Gerdau 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 Metalurgica Gerdau. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ascendis Pharma and Metalurgica Gerdau.
Diversification Opportunities for Ascendis Pharma and Metalurgica Gerdau
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ascendis and Metalurgica is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Ascendis Pharma AS and Metalurgica Gerdau SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metalurgica Gerdau 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 Metalurgica Gerdau. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metalurgica Gerdau has no effect on the direction of Ascendis Pharma i.e., Ascendis Pharma and Metalurgica Gerdau go up and down completely randomly.
Pair Corralation between Ascendis Pharma and Metalurgica Gerdau
Assuming the 90 days trading horizon Ascendis Pharma AS is expected to generate 1.45 times more return on investment than Metalurgica Gerdau. However, Ascendis Pharma is 1.45 times more volatile than Metalurgica Gerdau SA. It trades about 0.09 of its potential returns per unit of risk. Metalurgica Gerdau SA is currently generating about 0.03 per unit of risk. If you would invest 3,234 in Ascendis Pharma AS on August 26, 2024 and sell it today you would earn a total of 1,650 from holding Ascendis Pharma AS or generate 51.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Ascendis Pharma AS vs. Metalurgica Gerdau SA
Performance |
| Timeline |
| Ascendis Pharma AS |
| Metalurgica Gerdau |
Ascendis Pharma and Metalurgica Gerdau Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ascendis Pharma and Metalurgica Gerdau
The main advantage of trading using opposite Ascendis Pharma and Metalurgica Gerdau positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ascendis Pharma position performs unexpectedly, Metalurgica Gerdau 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 Metalurgica Gerdau will offset losses from the drop in Metalurgica Gerdau's long position.| Ascendis Pharma vs. Metalurgica Gerdau SA | Ascendis Pharma vs. salesforce inc | Ascendis Pharma vs. Waste Management | Ascendis Pharma vs. METISA Metalrgica Timboense |
| Metalurgica Gerdau vs. Gerdau SA | Metalurgica Gerdau vs. Metalurgica Gerdau SA | Metalurgica Gerdau vs. Usinas Siderrgicas de | Metalurgica Gerdau vs. Bradespar SA |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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