Correlation Between Ascendas Real and Mapletree Industrial

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

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

Diversification Opportunities for Ascendas Real and Mapletree Industrial

-0.29

Correlation Coefficient

Ascendas Real  Mapletree Industrial

Very good diversification

The 3 months correlation between Ascendas and Mapletree is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Ascendas Real Estate and Mapletree Industrial Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mapletree Industrial and Ascendas Real 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 Ascendas Real Estate are associated (or correlated) with Mapletree Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mapletree Industrial has no effect on the direction of Ascendas Real i.e., Ascendas Real and Mapletree Industrial go up and down completely randomly.

Pair Corralation between Ascendas Real and Mapletree Industrial

Assuming the 90 days horizon Ascendas Real Estate is expected to generate 0.42 times more return on investment than Mapletree Industrial. However, Ascendas Real Estate is 2.37 times less risky than Mapletree Industrial. It trades about 0.09 of its potential returns per unit of risk. Mapletree Industrial Trust is currently generating about -0.02 per unit of risk. If you would invest  170.00  in Ascendas Real Estate on December 30, 2024 and sell it today you would earn a total of  12.00  from holding Ascendas Real Estate or generate 7.06% return on investment over 90 days.

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

Ascendas Real Estate  vs.  Mapletree Industrial Trust

Ascendas Real Estate

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ascendas Real Estate are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Ascendas Real may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Mapletree Industrial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mapletree Industrial Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Mapletree Industrial is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Ascendas Real and Mapletree Industrial

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

The idea behind Ascendas Real Estate and Mapletree Industrial 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.

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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.