Correlation Between Ascendis Health and Nedbank
Can any of the company-specific risk be diversified away by investing in both Ascendis Health and Nedbank 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 Nedbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ascendis Health and Nedbank Group, you can compare the effects of market volatilities on Ascendis Health and Nedbank 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 Nedbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ascendis Health and Nedbank.
Diversification Opportunities for Ascendis Health and Nedbank
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ascendis and Nedbank is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Ascendis Health and Nedbank Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nedbank Group 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 Nedbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nedbank Group has no effect on the direction of Ascendis Health i.e., Ascendis Health and Nedbank go up and down completely randomly.
Pair Corralation between Ascendis Health and Nedbank
Assuming the 90 days trading horizon Ascendis Health is expected to generate 2.15 times more return on investment than Nedbank. However, Ascendis Health is 2.15 times more volatile than Nedbank Group. It trades about 0.04 of its potential returns per unit of risk. Nedbank Group is currently generating about 0.06 per unit of risk. If you would invest 6,100 in Ascendis Health on November 2, 2024 and sell it today you would earn a total of 2,300 from holding Ascendis Health or generate 37.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ascendis Health vs. Nedbank Group
Performance |
| Timeline |
| Ascendis Health |
| Nedbank Group |
Ascendis Health and Nedbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ascendis Health and Nedbank
The main advantage of trading using opposite Ascendis Health and Nedbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ascendis Health position performs unexpectedly, Nedbank 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 Nedbank will offset losses from the drop in Nedbank's long position.| Ascendis Health vs. Hosken Consolidated Investments | Ascendis Health vs. Brimstone Investment | Ascendis Health vs. Life Healthcare | Ascendis Health vs. Allied Electronics |
| Nedbank vs. Mantengu Mining | Nedbank vs. African Media Entertainment | Nedbank vs. CA Sales Holdings | Nedbank vs. Kumba Iron Ore |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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