Correlation Between Ascendis Health and Shoprite Holdings
Can any of the company-specific risk be diversified away by investing in both Ascendis Health and Shoprite 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 Shoprite 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 Shoprite Holdings, you can compare the effects of market volatilities on Ascendis Health and Shoprite 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 Shoprite Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ascendis Health and Shoprite Holdings.
Diversification Opportunities for Ascendis Health and Shoprite Holdings
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ascendis and Shoprite is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Ascendis Health and Shoprite Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shoprite 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 Shoprite Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shoprite Holdings has no effect on the direction of Ascendis Health i.e., Ascendis Health and Shoprite Holdings go up and down completely randomly.
Pair Corralation between Ascendis Health and Shoprite Holdings
Assuming the 90 days trading horizon Ascendis Health is expected to generate 1.06 times less return on investment than Shoprite Holdings. In addition to that, Ascendis Health is 1.28 times more volatile than Shoprite Holdings. It trades about 0.07 of its total potential returns per unit of risk. Shoprite Holdings is currently generating about 0.1 per unit of volatility. If you would invest 2,894,300 in Shoprite Holdings on August 28, 2024 and sell it today you would earn a total of 94,200 from holding Shoprite Holdings or generate 3.25% 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. Shoprite Holdings
Performance |
| Timeline |
| Ascendis Health |
| Shoprite Holdings |
Ascendis Health and Shoprite Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ascendis Health and Shoprite Holdings
The main advantage of trading using opposite Ascendis Health and Shoprite Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ascendis Health position performs unexpectedly, Shoprite 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 Shoprite Holdings will offset losses from the drop in Shoprite Holdings' long position.| Ascendis Health vs. Deneb Investments | Ascendis Health vs. HomeChoice Investments | Ascendis Health vs. E Media Holdings | Ascendis Health vs. Zeder Investments |
| Shoprite Holdings vs. CA Sales Holdings | Shoprite Holdings vs. Kap Industrial Holdings | Shoprite Holdings vs. Deneb Investments | Shoprite Holdings vs. City Lodge Hotels |
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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