Correlation Between Ascendas India and Corporacin Inmobiliaria

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

Diversification Opportunities for Ascendas India and Corporacin Inmobiliaria

0.68

Correlation Coefficient

Ascendas India  Corporacin Inmobiliaria

Poor diversification

The 3 months correlation between Ascendas and Corporacin is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Ascendas India Trust and Corporacin Inmobiliaria Vesta, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporacin Inmobiliaria 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 Corporacin Inmobiliaria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporacin Inmobiliaria has no effect on the direction of Ascendas India i.e., Ascendas India and Corporacin Inmobiliaria go up and down completely randomly.

Pair Corralation between Ascendas India and Corporacin Inmobiliaria

Assuming the 90 days horizon Ascendas India is expected to generate 1.15 times less return on investment than Corporacin Inmobiliaria. In addition to that, Ascendas India is 1.32 times more volatile than Corporacin Inmobiliaria Vesta,. It trades about 0.04 of its total potential returns per unit of risk. Corporacin Inmobiliaria Vesta, is currently generating about 0.05 per unit of volatility. If you would invest  2,553  in Corporacin Inmobiliaria Vesta, on September 20, 2024 and sell it today you would earn a total of  45.00  from holding Corporacin Inmobiliaria Vesta, or generate 1.76% return on investment over 90 days.

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

Ascendas India Trust  vs.  Corporacin Inmobiliaria Vesta,

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.

Corporacin Inmobiliaria

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Corporacin Inmobiliaria Vesta, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Ascendas India and Corporacin Inmobiliaria

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

The idea behind Ascendas India Trust and Corporacin Inmobiliaria Vesta, 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.