Correlation Between Hansa Biopharma and Ascelia Pharma

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

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

Diversification Opportunities for Hansa Biopharma and Ascelia Pharma

-0.38

Correlation Coefficient

Hansa Biopharma  Ascelia Pharma

Very good diversification

The 3 months correlation between Hansa and Ascelia is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Hansa Biopharma AB and Ascelia Pharma AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascelia Pharma AB and Hansa Biopharma 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 Hansa Biopharma AB are associated (or correlated) with Ascelia Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascelia Pharma AB has no effect on the direction of Hansa Biopharma i.e., Hansa Biopharma and Ascelia Pharma go up and down completely randomly.

Pair Corralation between Hansa Biopharma and Ascelia Pharma

Assuming the 90 days trading horizon Hansa Biopharma AB is expected to under-perform the Ascelia Pharma. In addition to that, Hansa Biopharma is 1.11 times more volatile than Ascelia Pharma AB. It trades about -0.21 of its total potential returns per unit of risk. Ascelia Pharma AB is currently generating about 0.02 per unit of volatility. If you would invest  292.00  in Ascelia Pharma AB on December 30, 2024 and sell it today you would earn a total of  0.00  from holding Ascelia Pharma AB or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Hansa Biopharma AB  vs.  Ascelia Pharma AB

Hansa Biopharma AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hansa Biopharma AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Ascelia Pharma AB

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ascelia Pharma AB are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Ascelia Pharma is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Hansa Biopharma and Ascelia Pharma

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

The idea behind Hansa Biopharma AB and Ascelia Pharma AB 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.