Correlation Between Ascendas India and Marcus Millichap

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

Diversification Opportunities for Ascendas India and Marcus Millichap

-0.78

Correlation Coefficient

Ascendas India  Marcus Millichap

Pay attention - limited upside

The 3 months correlation between Ascendas and Marcus is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Ascendas India Trust and Marcus Millichap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marcus Millichap 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 Marcus Millichap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marcus Millichap has no effect on the direction of Ascendas India i.e., Ascendas India and Marcus Millichap go up and down completely randomly.

Pair Corralation between Ascendas India and Marcus Millichap

Assuming the 90 days horizon Ascendas India Trust is expected to under-perform the Marcus Millichap. In addition to that, Ascendas India is 1.21 times more volatile than Marcus Millichap. It trades about -0.06 of its total potential returns per unit of risk. Marcus Millichap is currently generating about -0.03 per unit of volatility. If you would invest  4,070  in Marcus Millichap on September 19, 2024 and sell it today you would lose (145.00) from holding Marcus Millichap or give up 3.56% of portfolio value over 90 days.

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

Ascendas India Trust  vs.  Marcus Millichap

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 latest weak performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Marcus Millichap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marcus Millichap has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong primary indicators, Marcus Millichap is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Ascendas India and Marcus Millichap

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

The idea behind Ascendas India Trust and Marcus Millichap 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.