Correlation Between UCB SA and Ascencio
Can any of the company-specific risk be diversified away by investing in both UCB SA and Ascencio 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 UCB SA and Ascencio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UCB SA and Ascencio, you can compare the effects of market volatilities on UCB SA and Ascencio 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 UCB SA with a short position of Ascencio. Check out your portfolio center. Please also check ongoing floating volatility patterns of UCB SA and Ascencio.
Diversification Opportunities for UCB SA and Ascencio
Pay attention - limited upside
The 3 months correlation between UCB and Ascencio is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding UCB SA and Ascencio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascencio and UCB SA 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 UCB SA are associated (or correlated) with Ascencio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascencio has no effect on the direction of UCB SA i.e., UCB SA and Ascencio go up and down completely randomly.
Pair Corralation between UCB SA and Ascencio
Assuming the 90 days trading horizon UCB SA is expected to generate 1.67 times more return on investment than Ascencio. However, UCB SA is 1.67 times more volatile than Ascencio. It trades about 0.16 of its potential returns per unit of risk. Ascencio is currently generating about -0.06 per unit of risk. If you would invest 12,815 in UCB SA on August 24, 2024 and sell it today you would earn a total of 4,600 from holding UCB SA or generate 35.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UCB SA vs. Ascencio
Performance |
| Timeline |
| UCB SA |
| Ascencio |
UCB SA and Ascencio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UCB SA and Ascencio
The main advantage of trading using opposite UCB SA and Ascencio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UCB SA position performs unexpectedly, Ascencio 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 Ascencio will offset losses from the drop in Ascencio's long position.The idea behind UCB SA and Ascencio 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.| Ascencio vs. Retail Estates | Ascencio vs. Onward Medical NV | Ascencio vs. Home Invest Belgium | Ascencio vs. Vastned Retail Belgium |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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