Correlation Between Ascendis Health and Capitec Bank
Can any of the company-specific risk be diversified away by investing in both Ascendis Health and Capitec Bank 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 Capitec Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ascendis Health and Capitec Bank Holdings, you can compare the effects of market volatilities on Ascendis Health and Capitec Bank 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 Capitec Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ascendis Health and Capitec Bank.
Diversification Opportunities for Ascendis Health and Capitec Bank
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ascendis and Capitec is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Ascendis Health and Capitec Bank Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capitec Bank Holdings 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 Capitec Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capitec Bank Holdings has no effect on the direction of Ascendis Health i.e., Ascendis Health and Capitec Bank go up and down completely randomly.
Pair Corralation between Ascendis Health and Capitec Bank
Assuming the 90 days trading horizon Ascendis Health is expected to generate 3.03 times more return on investment than Capitec Bank. However, Ascendis Health is 3.03 times more volatile than Capitec Bank Holdings. It trades about 0.08 of its potential returns per unit of risk. Capitec Bank Holdings is currently generating about 0.04 per unit of risk. If you would invest 7,200 in Ascendis Health on September 2, 2024 and sell it today you would earn a total of 300.00 from holding Ascendis Health or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ascendis Health vs. Capitec Bank Holdings
Performance |
| Timeline |
| Ascendis Health |
| Capitec Bank Holdings |
Ascendis Health and Capitec Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ascendis Health and Capitec Bank
The main advantage of trading using opposite Ascendis Health and Capitec Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ascendis Health position performs unexpectedly, Capitec Bank 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 Capitec Bank will offset losses from the drop in Capitec Bank's long position.| Ascendis Health vs. Sasol Ltd Bee | Ascendis Health vs. Growthpoint Properties | Ascendis Health vs. AfricaRhodium ETF | Ascendis Health vs. CoreShares Preference Share |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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