Correlation Between Ascendas India and EXp World

Can any of the company-specific risk be diversified away by investing in both Ascendas India and EXp World 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 Ascendas India and EXp World into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ascendas India Trust and eXp World Holdings, you can compare the effects of market volatilities on Ascendas India and EXp World 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 Ascendas India with a short position of EXp World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ascendas India and EXp World.

Diversification Opportunities for Ascendas India and EXp World

-0.1

Correlation Coefficient

Ascendas India  EXp World

Good diversification

The 3 months correlation between Ascendas and EXp is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Ascendas India Trust and eXp World Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eXp World Holdings and Ascendas India 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 Ascendas India Trust are associated (or correlated) with EXp World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of eXp World Holdings has no effect on the direction of Ascendas India i.e., Ascendas India and EXp World go up and down completely randomly.

Pair Corralation between Ascendas India and EXp World

Assuming the 90 days horizon Ascendas India Trust is expected to generate 0.74 times more return on investment than EXp World. However, Ascendas India Trust is 1.34 times less risky than EXp World. It trades about -0.07 of its potential returns per unit of risk. eXp World Holdings is currently generating about -0.05 per unit of risk. If you would invest  87.00  in Ascendas India Trust on September 21, 2024 and sell it today you would lose (6.00) from holding Ascendas India Trust or give up 6.9% of portfolio value over 90 days.

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

Ascendas India Trust  vs.  eXp World Holdings

Ascendas India Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ascendas India Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Ascendas India is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

eXp World Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days eXp World Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Ascendas India and EXp World

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

The idea behind Ascendas India Trust and eXp World Holdings 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.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.