Correlation Between Ascendis Health and Pick N

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

By analyzing existing cross correlation between Ascendis Health and Pick N Pay, you can compare the effects of market volatilities on Ascendis Health and Pick N 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 Pick N. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ascendis Health and Pick N.

Diversification Opportunities for Ascendis Health and Pick N

0.26

Correlation Coefficient

Ascendis Health  Pick N

Modest diversification

The 3 months correlation between Ascendis and Pick is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Ascendis Health and Pick N Pay in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pick N Pay 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 Pick N. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pick N Pay has no effect on the direction of Ascendis Health i.e., Ascendis Health and Pick N go up and down completely randomly.

Pair Corralation between Ascendis Health and Pick N

Assuming the 90 days trading horizon Ascendis Health is expected to generate 2.21 times less return on investment than Pick N. In addition to that, Ascendis Health is 1.4 times more volatile than Pick N Pay. It trades about 0.07 of its total potential returns per unit of risk. Pick N Pay is currently generating about 0.22 per unit of volatility. If you would invest  236,100  in Pick N Pay on September 16, 2024 and sell it today you would earn a total of  74,000  from holding Pick N Pay or generate 31.34% return on investment over 90 days.

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

Ascendis Health  vs.  Pick N Pay

Ascendis Health

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ascendis Health are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Ascendis Health may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pick N Pay

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pick N Pay are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Pick N exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ascendis Health and Pick N

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

The idea behind Ascendis Health and Pick N Pay 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.