Correlation Between Bowler Metcalf and Ascendis Health
Can any of the company-specific risk be diversified away by investing in both Bowler Metcalf and Ascendis Health 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 Bowler Metcalf and Ascendis Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bowler Metcalf and Ascendis Health, you can compare the effects of market volatilities on Bowler Metcalf and Ascendis Health 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 Bowler Metcalf with a short position of Ascendis Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bowler Metcalf and Ascendis Health.
Diversification Opportunities for Bowler Metcalf and Ascendis Health
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bowler and Ascendis is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Bowler Metcalf and Ascendis Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascendis Health and Bowler Metcalf 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 Bowler Metcalf are associated (or correlated) with Ascendis Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascendis Health has no effect on the direction of Bowler Metcalf i.e., Bowler Metcalf and Ascendis Health go up and down completely randomly.
Pair Corralation between Bowler Metcalf and Ascendis Health
Assuming the 90 days trading horizon Bowler Metcalf is expected to generate 0.65 times more return on investment than Ascendis Health. However, Bowler Metcalf is 1.54 times less risky than Ascendis Health. It trades about 0.23 of its potential returns per unit of risk. Ascendis Health is currently generating about 0.07 per unit of risk. If you would invest 127,000 in Bowler Metcalf on August 28, 2024 and sell it today you would earn a total of 8,900 from holding Bowler Metcalf or generate 7.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bowler Metcalf vs. Ascendis Health
Performance |
| Timeline |
| Bowler Metcalf |
| Ascendis Health |
Bowler Metcalf and Ascendis Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bowler Metcalf and Ascendis Health
The main advantage of trading using opposite Bowler Metcalf and Ascendis Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bowler Metcalf position performs unexpectedly, Ascendis Health 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 Ascendis Health will offset losses from the drop in Ascendis Health's long position.| Bowler Metcalf vs. Datatec | Bowler Metcalf vs. Deneb Investments | Bowler Metcalf vs. City Lodge Hotels | Bowler Metcalf vs. Zeder Investments |
| Ascendis Health vs. Deneb Investments | Ascendis Health vs. HomeChoice Investments | Ascendis Health vs. E Media Holdings | Ascendis Health vs. Zeder Investments |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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