Correlation Between Lloyds Banking and Ascendis Pharma
Can any of the company-specific risk be diversified away by investing in both Lloyds Banking and Ascendis Pharma 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 Lloyds Banking and Ascendis Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lloyds Banking Group and Ascendis Pharma AS, you can compare the effects of market volatilities on Lloyds Banking and Ascendis Pharma 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 Lloyds Banking with a short position of Ascendis Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lloyds Banking and Ascendis Pharma.
Diversification Opportunities for Lloyds Banking and Ascendis Pharma
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lloyds and Ascendis is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Lloyds Banking Group and Ascendis Pharma AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascendis Pharma AS and Lloyds Banking 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 Lloyds Banking Group are associated (or correlated) with Ascendis Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascendis Pharma AS has no effect on the direction of Lloyds Banking i.e., Lloyds Banking and Ascendis Pharma go up and down completely randomly.
Pair Corralation between Lloyds Banking and Ascendis Pharma
Assuming the 90 days trading horizon Lloyds Banking is expected to generate 94.04 times less return on investment than Ascendis Pharma. But when comparing it to its historical volatility, Lloyds Banking Group is 1.4 times less risky than Ascendis Pharma. It trades about 0.0 of its potential returns per unit of risk. Ascendis Pharma AS is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 4,840 in Ascendis Pharma AS on September 1, 2024 and sell it today you would earn a total of 655.00 from holding Ascendis Pharma AS or generate 13.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Lloyds Banking Group vs. Ascendis Pharma AS
Performance |
| Timeline |
| Lloyds Banking Group |
| Ascendis Pharma AS |
Lloyds Banking and Ascendis Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lloyds Banking and Ascendis Pharma
The main advantage of trading using opposite Lloyds Banking and Ascendis Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lloyds Banking position performs unexpectedly, Ascendis Pharma 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 Pharma will offset losses from the drop in Ascendis Pharma's long position.| Lloyds Banking vs. Fras le SA | Lloyds Banking vs. Western Digital | Lloyds Banking vs. Energisa SA | Lloyds Banking vs. Clave Indices De |
| Ascendis Pharma vs. Raytheon Technologies | Ascendis Pharma vs. Bemobi Mobile Tech | Ascendis Pharma vs. Uber Technologies | Ascendis Pharma vs. Marvell Technology |
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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