Correlation Between Ascendis Pharma and FIXX Old

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

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

Diversification Opportunities for Ascendis Pharma and FIXX Old

-0.54

Correlation Coefficient

Ascendis Pharma  FIXX Old

Excellent diversification

The 3 months correlation between Ascendis and FIXX is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Ascendis Pharma AS and FIXX Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIXX Old and Ascendis Pharma 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 Pharma AS are associated (or correlated) with FIXX Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIXX Old has no effect on the direction of Ascendis Pharma i.e., Ascendis Pharma and FIXX Old go up and down completely randomly.

Pair Corralation between Ascendis Pharma and FIXX Old

Given the investment horizon of 90 days Ascendis Pharma is expected to generate 1.03 times less return on investment than FIXX Old. But when comparing it to its historical volatility, Ascendis Pharma AS is 1.65 times less risky than FIXX Old. It trades about 0.02 of its potential returns per unit of risk. FIXX Old is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  119.00  in FIXX Old on October 21, 2024 and sell it today you would lose (10.00) from holding FIXX Old or give up 8.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	27.94%
Values	Daily Returns

Ascendis Pharma AS  vs.  FIXX Old

Ascendis Pharma AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ascendis Pharma AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Ascendis Pharma is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

FIXX Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FIXX Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, FIXX Old is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ascendis Pharma and FIXX Old

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

The idea behind Ascendis Pharma AS and FIXX Old 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.