Correlation Between Ascendis Pharma and Healthpeak Properties

Can any of the company-specific risk be diversified away by investing in both Ascendis Pharma and Healthpeak Properties 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 Ascendis Pharma and Healthpeak Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ascendis Pharma AS and Healthpeak Properties, you can compare the effects of market volatilities on Ascendis Pharma and Healthpeak Properties 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 Ascendis Pharma with a short position of Healthpeak Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ascendis Pharma and Healthpeak Properties.

Diversification Opportunities for Ascendis Pharma and Healthpeak Properties

-0.16

Correlation Coefficient

Ascendis Pharma  Healthpeak Properties

Good diversification

The 3 months correlation between Ascendis and Healthpeak is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Ascendis Pharma AS and Healthpeak Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthpeak Properties and Ascendis Pharma 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 Ascendis Pharma AS are associated (or correlated) with Healthpeak Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthpeak Properties has no effect on the direction of Ascendis Pharma i.e., Ascendis Pharma and Healthpeak Properties go up and down completely randomly.

Pair Corralation between Ascendis Pharma and Healthpeak Properties

Assuming the 90 days trading horizon Ascendis Pharma AS is expected to generate 1.2 times more return on investment than Healthpeak Properties. However, Ascendis Pharma is 1.2 times more volatile than Healthpeak Properties. It trades about 0.11 of its potential returns per unit of risk. Healthpeak Properties is currently generating about 0.03 per unit of risk. If you would invest  5,100  in Ascendis Pharma AS on October 9, 2024 and sell it today you would earn a total of  582.00  from holding Ascendis Pharma AS or generate 11.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Ascendis Pharma AS  vs.  Healthpeak Properties

Ascendis Pharma AS

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ascendis Pharma AS are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Ascendis Pharma sustained solid returns over the last few months and may actually be approaching a breakup point.

Healthpeak Properties

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Healthpeak Properties are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, Healthpeak Properties is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ascendis Pharma and Healthpeak Properties

The main advantage of trading using opposite Ascendis Pharma and Healthpeak Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ascendis Pharma position performs unexpectedly, Healthpeak Properties 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 Healthpeak Properties will offset losses from the drop in Healthpeak Properties' long position.

The idea behind Ascendis Pharma AS and Healthpeak Properties 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.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.