Correlation Between Generation Income and Ascendas India

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

By analyzing existing cross correlation between Generation Income Properties and Ascendas India Trust, you can compare the effects of market volatilities on Generation Income and Ascendas India 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 Generation Income with a short position of Ascendas India. Check out your portfolio center. Please also check ongoing floating volatility patterns of Generation Income and Ascendas India.

Diversification Opportunities for Generation Income and Ascendas India

0.54

Correlation Coefficient

Generation Income  Ascendas India

Very weak diversification

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

Pair Corralation between Generation Income and Ascendas India

Assuming the 90 days horizon Generation Income Properties is expected to generate 37.22 times more return on investment than Ascendas India. However, Generation Income is 37.22 times more volatile than Ascendas India Trust. It trades about 0.15 of its potential returns per unit of risk. Ascendas India Trust is currently generating about 0.03 per unit of risk. If you would invest  43.00  in Generation Income Properties on September 14, 2024 and sell it today you would lose (19.00) from holding Generation Income Properties or give up 44.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	61.87%
Values	Daily Returns

Generation Income Properties  vs.  Ascendas India Trust

Generation Income

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Generation Income Properties are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Generation Income showed solid returns over the last few months and may actually be approaching a breakup point.

Ascendas India Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ascendas India Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Generation Income and Ascendas India

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

The idea behind Generation Income Properties and Ascendas India Trust 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.