Correlation Between Ascendis Health and AngloGold Ashanti

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

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

Diversification Opportunities for Ascendis Health and AngloGold Ashanti

-0.28

Correlation Coefficient

Ascendis Health  AngloGold Ashanti

Very good diversification

The 3 months correlation between Ascendis and AngloGold is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Ascendis Health and AngloGold Ashanti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AngloGold Ashanti and Ascendis Health 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 Health are associated (or correlated) with AngloGold Ashanti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AngloGold Ashanti has no effect on the direction of Ascendis Health i.e., Ascendis Health and AngloGold Ashanti go up and down completely randomly.

Pair Corralation between Ascendis Health and AngloGold Ashanti

Assuming the 90 days trading horizon Ascendis Health is expected to generate 1.1 times less return on investment than AngloGold Ashanti. In addition to that, Ascendis Health is 1.43 times more volatile than AngloGold Ashanti. It trades about 0.08 of its total potential returns per unit of risk. AngloGold Ashanti is currently generating about 0.12 per unit of volatility. If you would invest  4,664,000  in AngloGold Ashanti on December 4, 2024 and sell it today you would earn a total of  943,400  from holding AngloGold Ashanti or generate 20.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Ascendis Health  vs.  AngloGold Ashanti

Ascendis Health

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ascendis Health are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Ascendis Health exhibited solid returns over the last few months and may actually be approaching a breakup point.

AngloGold Ashanti

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AngloGold Ashanti are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, AngloGold Ashanti exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ascendis Health and AngloGold Ashanti

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

The idea behind Ascendis Health and AngloGold Ashanti 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.