Correlation Between Ascendis Health and Datatec
Can any of the company-specific risk be diversified away by investing in both Ascendis Health and Datatec 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 Datatec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ascendis Health and Datatec, you can compare the effects of market volatilities on Ascendis Health and Datatec 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 Datatec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ascendis Health and Datatec.
Diversification Opportunities for Ascendis Health and Datatec
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ascendis and Datatec is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Ascendis Health and Datatec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datatec 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 Datatec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datatec has no effect on the direction of Ascendis Health i.e., Ascendis Health and Datatec go up and down completely randomly.
Pair Corralation between Ascendis Health and Datatec
Assuming the 90 days trading horizon Ascendis Health is expected to generate 1.47 times less return on investment than Datatec. In addition to that, Ascendis Health is 1.34 times more volatile than Datatec. It trades about 0.08 of its total potential returns per unit of risk. Datatec is currently generating about 0.15 per unit of volatility. If you would invest 406,800 in Datatec on September 2, 2024 and sell it today you would earn a total of 28,400 from holding Datatec or generate 6.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ascendis Health vs. Datatec
Performance |
| Timeline |
| Ascendis Health |
| Datatec |
Ascendis Health and Datatec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ascendis Health and Datatec
The main advantage of trading using opposite Ascendis Health and Datatec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ascendis Health position performs unexpectedly, Datatec 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 Datatec will offset losses from the drop in Datatec'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 |
| Datatec vs. Prosus NV | Datatec vs. British American Tobacco | Datatec vs. Glencore PLC | Datatec vs. Anglo American 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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