Correlation Between CSL and Ascletis Pharma

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

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

Diversification Opportunities for CSL and Ascletis Pharma

-0.66

Correlation Coefficient

CSL  Ascletis Pharma

Excellent diversification

The 3 months correlation between CSL and Ascletis is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding CSL and Ascletis Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascletis Pharma and CSL 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 CSL are associated (or correlated) with Ascletis Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascletis Pharma has no effect on the direction of CSL i.e., CSL and Ascletis Pharma go up and down completely randomly.

Pair Corralation between CSL and Ascletis Pharma

Assuming the 90 days horizon CSL is expected to generate 0.27 times more return on investment than Ascletis Pharma. However, CSL is 3.76 times less risky than Ascletis Pharma. It trades about -0.01 of its potential returns per unit of risk. Ascletis Pharma is currently generating about -0.01 per unit of risk. If you would invest  9,993  in CSL on October 9, 2024 and sell it today you would lose (1,159) from holding CSL or give up 11.6% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.4%
Values	Daily Returns

CSL  vs.  Ascletis Pharma

CSL

Risk-Adjusted Performance

0 of 100

Very Weak

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

Ascletis Pharma

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ascletis Pharma are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, Ascletis Pharma reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CSL and Ascletis Pharma

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

The idea behind CSL and Ascletis Pharma 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.