Correlation Between Ascendis Health and RMB Holdings
Can any of the company-specific risk be diversified away by investing in both Ascendis Health and RMB Holdings 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 RMB Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ascendis Health and RMB Holdings, you can compare the effects of market volatilities on Ascendis Health and RMB Holdings 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 RMB Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ascendis Health and RMB Holdings.
Diversification Opportunities for Ascendis Health and RMB Holdings
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ascendis and RMB is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Ascendis Health and RMB Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RMB 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 RMB Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RMB Holdings has no effect on the direction of Ascendis Health i.e., Ascendis Health and RMB Holdings go up and down completely randomly.
Pair Corralation between Ascendis Health and RMB Holdings
Assuming the 90 days trading horizon Ascendis Health is expected to generate 1.16 times more return on investment than RMB Holdings. However, Ascendis Health is 1.16 times more volatile than RMB Holdings. It trades about -0.08 of its potential returns per unit of risk. RMB Holdings is currently generating about -0.15 per unit of risk. If you would invest 8,500 in Ascendis Health on November 28, 2024 and sell it today you would lose (400.00) from holding Ascendis Health or give up 4.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ascendis Health vs. RMB Holdings
Performance |
| Timeline |
| Ascendis Health |
| RMB Holdings |
Ascendis Health and RMB Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ascendis Health and RMB Holdings
The main advantage of trading using opposite Ascendis Health and RMB Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ascendis Health position performs unexpectedly, RMB Holdings 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 RMB Holdings will offset losses from the drop in RMB Holdings' long position.| Ascendis Health vs. Harmony Gold Mining | Ascendis Health vs. Astoria Investments | Ascendis Health vs. Deneb Investments | Ascendis Health vs. Safari Investments RSA |
| RMB Holdings vs. Astoria Investments | RMB Holdings vs. Standard Bank Group | RMB Holdings vs. CA Sales Holdings | RMB Holdings vs. MC Mining |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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