Correlation Between Bytes Technology and Ascendis Health

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Can any of the company-specific risk be diversified away by investing in both Bytes Technology 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 Bytes Technology and Ascendis Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bytes Technology and Ascendis Health, you can compare the effects of market volatilities on Bytes Technology 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 Bytes Technology with a short position of Ascendis Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bytes Technology and Ascendis Health.

Diversification Opportunities for Bytes Technology and Ascendis Health

0.03
  Correlation Coefficient

Significant diversification

The 3 months correlation between Bytes and Ascendis is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Bytes Technology and Ascendis Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascendis Health and Bytes Technology 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 Bytes Technology 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 Bytes Technology i.e., Bytes Technology and Ascendis Health go up and down completely randomly.

Pair Corralation between Bytes Technology and Ascendis Health

Assuming the 90 days trading horizon Bytes Technology is expected to generate 788.0 times less return on investment than Ascendis Health. In addition to that, Bytes Technology is 1.08 times more volatile than Ascendis Health. It trades about 0.0 of its total potential returns per unit of risk. Ascendis Health is currently generating about 0.03 per unit of volatility. If you would invest  6,300  in Ascendis Health on August 27, 2024 and sell it today you would earn a total of  1,100  from holding Ascendis Health or generate 17.46% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Bytes Technology  vs.  Ascendis Health

 Performance 
       Timeline  
Bytes Technology 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Bytes Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Bytes Technology is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.
Ascendis Health 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Ascendis Health are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Ascendis Health may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Bytes Technology and Ascendis Health Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bytes Technology and Ascendis Health

The main advantage of trading using opposite Bytes Technology and Ascendis Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bytes Technology 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.
The idea behind Bytes Technology and Ascendis Health pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.

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