Correlation Between Ascendis Health and S A P
Can any of the company-specific risk be diversified away by investing in both Ascendis Health and S A P 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 S A P into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ascendis Health and Sappi, you can compare the effects of market volatilities on Ascendis Health and S A P 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 S A P. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ascendis Health and S A P.
Diversification Opportunities for Ascendis Health and S A P
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ascendis and SAP is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Ascendis Health and Sappi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sappi 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 S A P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sappi has no effect on the direction of Ascendis Health i.e., Ascendis Health and S A P go up and down completely randomly.
Pair Corralation between Ascendis Health and S A P
Assuming the 90 days trading horizon Ascendis Health is expected to generate 1.23 times less return on investment than S A P. In addition to that, Ascendis Health is 1.15 times more volatile than Sappi. It trades about 0.08 of its total potential returns per unit of risk. Sappi is currently generating about 0.11 per unit of volatility. If you would invest 476,600 in Sappi on September 1, 2024 and sell it today you would earn a total of 27,700 from holding Sappi or generate 5.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Ascendis Health vs. Sappi
Performance |
| Timeline |
| Ascendis Health |
| Sappi |
Ascendis Health and S A P Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ascendis Health and S A P
The main advantage of trading using opposite Ascendis Health and S A P positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ascendis Health position performs unexpectedly, S A P 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 S A P will offset losses from the drop in S A P's long position.| Ascendis Health vs. Aspen Pharmacare Holdings | Ascendis Health vs. Sasol Ltd Bee | Ascendis Health vs. Growthpoint Properties | Ascendis Health vs. AfricaRhodium ETF |
| S A P vs. Sasol Ltd Bee | S A P vs. Growthpoint Properties | S A P vs. AfricaRhodium ETF | S A P vs. CoreShares Preference Share |
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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