Correlation Between Technos SA and Ascendis Pharma

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

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

Diversification Opportunities for Technos SA and Ascendis Pharma

0.04

Correlation Coefficient

Technos SA  Ascendis Pharma

Significant diversification

The 3 months correlation between Technos and Ascendis is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Technos SA and Ascendis Pharma AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascendis Pharma AS and Technos SA 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 Technos SA are associated (or correlated) with Ascendis Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascendis Pharma AS has no effect on the direction of Technos SA i.e., Technos SA and Ascendis Pharma go up and down completely randomly.

Pair Corralation between Technos SA and Ascendis Pharma

Assuming the 90 days trading horizon Technos SA is expected to generate 2.18 times more return on investment than Ascendis Pharma. However, Technos SA is 2.18 times more volatile than Ascendis Pharma AS. It trades about 0.06 of its potential returns per unit of risk. Ascendis Pharma AS is currently generating about 0.03 per unit of risk. If you would invest  502.00  in Technos SA on September 14, 2024 and sell it today you would earn a total of  53.00  from holding Technos SA or generate 10.56% return on investment over 90 days.

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

Technos SA  vs.  Ascendis Pharma AS

Technos SA

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Technos SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Technos SA unveiled solid returns over the last few months and may actually be approaching a breakup point.

Ascendis Pharma AS

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ascendis Pharma AS are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Ascendis Pharma is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Technos SA and Ascendis Pharma

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

The idea behind Technos SA and Ascendis Pharma AS 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.