Correlation Between Ascendis Pharma and Insmed
Can any of the company-specific risk be diversified away by investing in both Ascendis Pharma and Insmed 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 Insmed 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 Insmed Inc, you can compare the effects of market volatilities on Ascendis Pharma and Insmed 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 Insmed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ascendis Pharma and Insmed.
Diversification Opportunities for Ascendis Pharma and Insmed
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ascendis and Insmed is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Ascendis Pharma AS and Insmed Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insmed Inc 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 Insmed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insmed Inc has no effect on the direction of Ascendis Pharma i.e., Ascendis Pharma and Insmed go up and down completely randomly.
Pair Corralation between Ascendis Pharma and Insmed
Given the investment horizon of 90 days Ascendis Pharma is expected to generate 2.59 times less return on investment than Insmed. But when comparing it to its historical volatility, Ascendis Pharma AS is 1.55 times less risky than Insmed. It trades about 0.03 of its potential returns per unit of risk. Insmed Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 7,196 in Insmed Inc on August 27, 2024 and sell it today you would earn a total of 213.00 from holding Insmed Inc or generate 2.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ascendis Pharma AS vs. Insmed Inc
Performance |
| Timeline |
| Ascendis Pharma AS |
| Insmed Inc |
Ascendis Pharma and Insmed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ascendis Pharma and Insmed
The main advantage of trading using opposite Ascendis Pharma and Insmed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ascendis Pharma position performs unexpectedly, Insmed 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 Insmed will offset losses from the drop in Insmed's long position.| Ascendis Pharma vs. Eliem Therapeutics | Ascendis Pharma vs. HCW Biologics | Ascendis Pharma vs. Scpharmaceuticals | Ascendis Pharma vs. Milestone Pharmaceuticals |
| Insmed vs. Ascendis Pharma AS | Insmed vs. Apellis Pharmaceuticals | Insmed vs. BeiGene | Insmed vs. Akero Therapeutics |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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