Correlation Between Dennys Corp and Ascent Solar

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

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

Diversification Opportunities for Dennys Corp and Ascent Solar

0.3

Correlation Coefficient

Dennys Corp  Ascent Solar

Weak diversification

The 3 months correlation between Dennys and Ascent is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Dennys Corp and Ascent Solar Technologies, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascent Solar Technol and Dennys Corp 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 Dennys Corp are associated (or correlated) with Ascent Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascent Solar Technol has no effect on the direction of Dennys Corp i.e., Dennys Corp and Ascent Solar go up and down completely randomly.

Pair Corralation between Dennys Corp and Ascent Solar

Given the investment horizon of 90 days Dennys Corp is expected to under-perform the Ascent Solar. But the stock apears to be less risky and, when comparing its historical volatility, Dennys Corp is 1.36 times less risky than Ascent Solar. The stock trades about -0.06 of its potential returns per unit of risk. The Ascent Solar Technologies, is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  261.00  in Ascent Solar Technologies, on September 16, 2024 and sell it today you would lose (6.00) from holding Ascent Solar Technologies, or give up 2.3% of portfolio value over 90 days.

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

Dennys Corp  vs.  Ascent Solar Technologies,

Dennys Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dennys Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Dennys Corp is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Ascent Solar Technol

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ascent Solar Technologies, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Ascent Solar is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Dennys Corp and Ascent Solar

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

The idea behind Dennys Corp and Ascent Solar Technologies, 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 Stocks Directory module to find actively traded stocks across global markets.