Correlation Between Ascendis Pharma and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Ascendis Pharma and Dow Jones 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 Pharma and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ascendis Pharma AS and Dow Jones Industrial, you can compare the effects of market volatilities on Ascendis Pharma and Dow Jones 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 Pharma with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ascendis Pharma and Dow Jones.
Diversification Opportunities for Ascendis Pharma and Dow Jones
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ascendis and Dow is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Ascendis Pharma AS and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Ascendis Pharma 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 Pharma AS are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Ascendis Pharma i.e., Ascendis Pharma and Dow Jones go up and down completely randomly.
Pair Corralation between Ascendis Pharma and Dow Jones
Given the investment horizon of 90 days Ascendis Pharma AS is expected to generate 4.3 times more return on investment than Dow Jones. However, Ascendis Pharma is 4.3 times more volatile than Dow Jones Industrial. It trades about 0.02 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 11,389 in Ascendis Pharma AS on November 2, 2024 and sell it today you would earn a total of 1,341 from holding Ascendis Pharma AS or generate 11.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Ascendis Pharma AS vs. Dow Jones Industrial
Performance |
| Timeline |
Ascendis Pharma and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Ascendis Pharma AS
Pair trading matchups for Ascendis Pharma
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Ascendis Pharma and Dow Jones
The main advantage of trading using opposite Ascendis Pharma and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ascendis Pharma position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Ascendis Pharma vs. Apellis Pharmaceuticals | Ascendis Pharma vs. Akero Therapeutics | Ascendis Pharma vs. Blueprint Medicines Corp | Ascendis Pharma vs. Replimune Group |
| Dow Jones vs. Cincinnati Financial | Dow Jones vs. Kellanova | Dow Jones vs. Acme United | Dow Jones vs. Procter Gamble |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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