Correlation Between Larimar Therapeutics and Ascendis Pharma
Can any of the company-specific risk be diversified away by investing in both Larimar Therapeutics 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 Larimar Therapeutics and Ascendis Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Larimar Therapeutics and Ascendis Pharma AS, you can compare the effects of market volatilities on Larimar Therapeutics 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 Larimar Therapeutics with a short position of Ascendis Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Larimar Therapeutics and Ascendis Pharma.
Diversification Opportunities for Larimar Therapeutics and Ascendis Pharma
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Larimar and Ascendis is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Larimar Therapeutics 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 Larimar Therapeutics 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 Larimar Therapeutics 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 Larimar Therapeutics i.e., Larimar Therapeutics and Ascendis Pharma go up and down completely randomly.
Pair Corralation between Larimar Therapeutics and Ascendis Pharma
Given the investment horizon of 90 days Larimar Therapeutics is expected to generate 2.2 times more return on investment than Ascendis Pharma. However, Larimar Therapeutics is 2.2 times more volatile than Ascendis Pharma AS. It trades about 0.07 of its potential returns per unit of risk. Ascendis Pharma AS is currently generating about 0.06 per unit of risk. If you would invest 340.00 in Larimar Therapeutics on August 24, 2024 and sell it today you would earn a total of 273.00 from holding Larimar Therapeutics or generate 80.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Larimar Therapeutics vs. Ascendis Pharma AS
Performance |
| Timeline |
| Larimar Therapeutics |
| Ascendis Pharma AS |
Larimar Therapeutics and Ascendis Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Larimar Therapeutics and Ascendis Pharma
The main advantage of trading using opposite Larimar Therapeutics and Ascendis Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Larimar Therapeutics 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.| Larimar Therapeutics vs. Vaxcyte | Larimar Therapeutics vs. Syndax Pharmaceuticals | Larimar Therapeutics vs. Merus BV | Larimar Therapeutics vs. Sutro Biopharma |
| Ascendis Pharma vs. Lyra Therapeutics | Ascendis Pharma vs. Hookipa Pharma | Ascendis Pharma vs. Cingulate Warrants | Ascendis Pharma vs. SAB Biotherapeutics |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |