Correlation Between Kap Industrial and Ascendis Health
Can any of the company-specific risk be diversified away by investing in both Kap Industrial 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 Kap Industrial and Ascendis Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kap Industrial Holdings and Ascendis Health, you can compare the effects of market volatilities on Kap Industrial 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 Kap Industrial with a short position of Ascendis Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kap Industrial and Ascendis Health.
Diversification Opportunities for Kap Industrial and Ascendis Health
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kap and Ascendis is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Kap Industrial Holdings and Ascendis Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascendis Health and Kap Industrial 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 Kap Industrial Holdings 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 Kap Industrial i.e., Kap Industrial and Ascendis Health go up and down completely randomly.
Pair Corralation between Kap Industrial and Ascendis Health
Assuming the 90 days trading horizon Kap Industrial Holdings is expected to under-perform the Ascendis Health. But the stock apears to be less risky and, when comparing its historical volatility, Kap Industrial Holdings is 1.14 times less risky than Ascendis Health. The stock trades about -0.22 of its potential returns per unit of risk. The Ascendis Health is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 7,000 in Ascendis Health on August 28, 2024 and sell it today you would earn a total of 200.00 from holding Ascendis Health or generate 2.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kap Industrial Holdings vs. Ascendis Health
Performance |
| Timeline |
| Kap Industrial Holdings |
| Ascendis Health |
Kap Industrial and Ascendis Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kap Industrial and Ascendis Health
The main advantage of trading using opposite Kap Industrial and Ascendis Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kap Industrial 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.| Kap Industrial vs. ABSA Bank Limited | Kap Industrial vs. Astral Foods | Kap Industrial vs. Hosken Consolidated Investments | Kap Industrial vs. Trematon Capital 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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