Correlation Between Ascendis Health and Deneb Investments
Can any of the company-specific risk be diversified away by investing in both Ascendis Health and Deneb Investments 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 Deneb Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ascendis Health and Deneb Investments, you can compare the effects of market volatilities on Ascendis Health and Deneb Investments 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 Deneb Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ascendis Health and Deneb Investments.
Diversification Opportunities for Ascendis Health and Deneb Investments
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ascendis and Deneb is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Ascendis Health and Deneb Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deneb Investments 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 Deneb Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deneb Investments has no effect on the direction of Ascendis Health i.e., Ascendis Health and Deneb Investments go up and down completely randomly.
Pair Corralation between Ascendis Health and Deneb Investments
Assuming the 90 days trading horizon Ascendis Health is expected to generate 3.16 times more return on investment than Deneb Investments. However, Ascendis Health is 3.16 times more volatile than Deneb Investments. It trades about 0.18 of its potential returns per unit of risk. Deneb Investments is currently generating about 0.4 per unit of risk. If you would invest 7,000 in Ascendis Health on August 28, 2024 and sell it today you would earn a total of 500.00 from holding Ascendis Health or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ascendis Health vs. Deneb Investments
Performance |
| Timeline |
| Ascendis Health |
| Deneb Investments |
Ascendis Health and Deneb Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ascendis Health and Deneb Investments
The main advantage of trading using opposite Ascendis Health and Deneb Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ascendis Health position performs unexpectedly, Deneb Investments 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 Deneb Investments will offset losses from the drop in Deneb Investments' long position.| Ascendis Health vs. Trematon Capital Investments | Ascendis Health vs. Hosken Consolidated Investments | Ascendis Health vs. Allied Electronics | Ascendis Health vs. Kumba Iron Ore |
| Deneb Investments vs. Blue Label Telecoms | Deneb Investments vs. CA Sales Holdings | Deneb Investments vs. Allied Electronics | Deneb Investments vs. RCL Foods |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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