Correlation Between Ascendis Pharma and Eton Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Ascendis Pharma and Eton Pharmaceuticals 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 Eton Pharmaceuticals 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 Eton Pharmaceuticals, you can compare the effects of market volatilities on Ascendis Pharma and Eton Pharmaceuticals 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 Eton Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ascendis Pharma and Eton Pharmaceuticals.
Diversification Opportunities for Ascendis Pharma and Eton Pharmaceuticals
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ascendis and Eton is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Ascendis Pharma AS and Eton Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eton Pharmaceuticals 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 Eton Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eton Pharmaceuticals has no effect on the direction of Ascendis Pharma i.e., Ascendis Pharma and Eton Pharmaceuticals go up and down completely randomly.
Pair Corralation between Ascendis Pharma and Eton Pharmaceuticals
Given the investment horizon of 90 days Ascendis Pharma AS is expected to generate 0.76 times more return on investment than Eton Pharmaceuticals. However, Ascendis Pharma AS is 1.31 times less risky than Eton Pharmaceuticals. It trades about 0.0 of its potential returns per unit of risk. Eton Pharmaceuticals is currently generating about -0.14 per unit of risk. If you would invest 15,231 in Ascendis Pharma AS on January 12, 2025 and sell it today you would lose (132.00) from holding Ascendis Pharma AS or give up 0.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ascendis Pharma AS vs. Eton Pharmaceuticals
Performance |
| Timeline |
| Ascendis Pharma AS |
| Eton Pharmaceuticals |
Ascendis Pharma and Eton Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ascendis Pharma and Eton Pharmaceuticals
The main advantage of trading using opposite Ascendis Pharma and Eton Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ascendis Pharma position performs unexpectedly, Eton Pharmaceuticals 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 Eton Pharmaceuticals will offset losses from the drop in Eton Pharmaceuticals' long position.| Ascendis Pharma vs. Apellis Pharmaceuticals | Ascendis Pharma vs. Akero Therapeutics | Ascendis Pharma vs. Blueprint Medicines Corp | Ascendis Pharma vs. Replimune Group |
| Eton Pharmaceuticals vs. Connect Biopharma Holdings | Eton Pharmaceuticals vs. Acumen Pharmaceuticals | Eton Pharmaceuticals vs. Nuvation Bio | Eton Pharmaceuticals vs. Eledon Pharmaceuticals |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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