Correlation Between BGNE Old and Ascendis Pharma

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

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

Diversification Opportunities for BGNE Old and Ascendis Pharma

0.0

Correlation Coefficient

BGNE Old  Ascendis Pharma

Pay attention - limited upside

The 3 months correlation between BGNE and Ascendis is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BGNE Old and Ascendis Pharma AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascendis Pharma AS and BGNE Old 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 BGNE Old are associated (or correlated) with Ascendis Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascendis Pharma AS has no effect on the direction of BGNE Old i.e., BGNE Old and Ascendis Pharma go up and down completely randomly.

Pair Corralation between BGNE Old and Ascendis Pharma

If you would invest  13,608  in Ascendis Pharma AS on November 29, 2024 and sell it today you would earn a total of  1,653  from holding Ascendis Pharma AS or generate 12.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

BGNE Old  vs.  Ascendis Pharma AS

BGNE Old

Risk-Adjusted Performance

Very Weak

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

Ascendis Pharma AS

Risk-Adjusted Performance

Modest

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

Pair Trading with BGNE Old and Ascendis Pharma

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

The idea behind BGNE Old and Ascendis Pharma AS 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.