Correlation Between Ascendas India and FirstService Corp
Can any of the company-specific risk be diversified away by investing in both Ascendas India and FirstService Corp 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 Ascendas India and FirstService Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ascendas India Trust and FirstService Corp, you can compare the effects of market volatilities on Ascendas India and FirstService Corp 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 Ascendas India with a short position of FirstService Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ascendas India and FirstService Corp.
Diversification Opportunities for Ascendas India and FirstService Corp
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ascendas and FirstService is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Ascendas India Trust and FirstService Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FirstService Corp and Ascendas India 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 Ascendas India Trust are associated (or correlated) with FirstService Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FirstService Corp has no effect on the direction of Ascendas India i.e., Ascendas India and FirstService Corp go up and down completely randomly.
Pair Corralation between Ascendas India and FirstService Corp
Assuming the 90 days horizon Ascendas India Trust is expected to generate 3.2 times more return on investment than FirstService Corp. However, Ascendas India is 3.2 times more volatile than FirstService Corp. It trades about 0.03 of its potential returns per unit of risk. FirstService Corp is currently generating about 0.08 per unit of risk. If you would invest 70.00 in Ascendas India Trust on September 14, 2024 and sell it today you would earn a total of 8.00 from holding Ascendas India Trust or generate 11.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 84.24% |
| Values | Daily Returns |
Ascendas India Trust vs. FirstService Corp
Performance |
| Timeline |
| Ascendas India Trust |
| FirstService Corp |
Ascendas India and FirstService Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ascendas India and FirstService Corp
The main advantage of trading using opposite Ascendas India and FirstService Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ascendas India position performs unexpectedly, FirstService Corp 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 FirstService Corp will offset losses from the drop in FirstService Corp's long position.| Ascendas India vs. Asia Pptys | Ascendas India vs. Adler Group SA | Ascendas India vs. Aztec Land Comb | Ascendas India vs. Ambase Corp |
| FirstService Corp vs. Ascendas India Trust | FirstService Corp vs. Asia Pptys | FirstService Corp vs. Adler Group SA | FirstService Corp vs. Aztec Land Comb |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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