Correlation Between Ascendis Health and Astral Foods
Can any of the company-specific risk be diversified away by investing in both Ascendis Health and Astral Foods 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 Health and Astral Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ascendis Health and Astral Foods, you can compare the effects of market volatilities on Ascendis Health and Astral Foods 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 Health with a short position of Astral Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ascendis Health and Astral Foods.
Diversification Opportunities for Ascendis Health and Astral Foods
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ascendis and Astral is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Ascendis Health and Astral Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astral Foods and Ascendis Health 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 Health are associated (or correlated) with Astral Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astral Foods has no effect on the direction of Ascendis Health i.e., Ascendis Health and Astral Foods go up and down completely randomly.
Pair Corralation between Ascendis Health and Astral Foods
Assuming the 90 days trading horizon Ascendis Health is expected to under-perform the Astral Foods. In addition to that, Ascendis Health is 2.66 times more volatile than Astral Foods. It trades about -0.18 of its total potential returns per unit of risk. Astral Foods is currently generating about -0.11 per unit of volatility. If you would invest 1,843,500 in Astral Foods on November 3, 2024 and sell it today you would lose (67,200) from holding Astral Foods or give up 3.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ascendis Health vs. Astral Foods
Performance |
| Timeline |
| Ascendis Health |
| Astral Foods |
Ascendis Health and Astral Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ascendis Health and Astral Foods
The main advantage of trading using opposite Ascendis Health and Astral Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ascendis Health position performs unexpectedly, Astral Foods 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 Astral Foods will offset losses from the drop in Astral Foods' long position.| Ascendis Health vs. Hosken Consolidated Investments | Ascendis Health vs. Brimstone Investment | Ascendis Health vs. Life Healthcare | Ascendis Health vs. Allied Electronics |
| Astral Foods vs. Prosus NV | Astral Foods vs. Compagnie Financire Richemont | Astral Foods vs. British American Tobacco | Astral Foods vs. Glencore PLC |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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