Correlation Between Ascendas India and IRSA Inversiones

Can any of the company-specific risk be diversified away by investing in both Ascendas India and IRSA Inversiones 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 IRSA Inversiones 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 IRSA Inversiones Y, you can compare the effects of market volatilities on Ascendas India and IRSA Inversiones 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 IRSA Inversiones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ascendas India and IRSA Inversiones.

Diversification Opportunities for Ascendas India and IRSA Inversiones

-0.71

Correlation Coefficient

Ascendas India  IRSA Inversiones

Pay attention - limited upside

The 3 months correlation between Ascendas and IRSA is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Ascendas India Trust and IRSA Inversiones Y in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IRSA Inversiones Y 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 IRSA Inversiones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IRSA Inversiones Y has no effect on the direction of Ascendas India i.e., Ascendas India and IRSA Inversiones go up and down completely randomly.

Pair Corralation between Ascendas India and IRSA Inversiones

Assuming the 90 days horizon Ascendas India Trust is expected to under-perform the IRSA Inversiones. But the pink sheet apears to be less risky and, when comparing its historical volatility, Ascendas India Trust is 1.5 times less risky than IRSA Inversiones. The pink sheet trades about -0.03 of its potential returns per unit of risk. The IRSA Inversiones Y is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest  913.00  in IRSA Inversiones Y on September 2, 2024 and sell it today you would earn a total of  800.00  from holding IRSA Inversiones Y or generate 87.62% return on investment over 90 days.

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

Ascendas India Trust  vs.  IRSA Inversiones Y

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 newest stock price disturbance, may contribute to mid-run losses for the stockholders.

IRSA Inversiones Y

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in IRSA Inversiones Y are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, IRSA Inversiones unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ascendas India and IRSA Inversiones

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

The idea behind Ascendas India Trust and IRSA Inversiones Y 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.