Correlation Between Ascendas India and Avalon GloboCare

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

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

Diversification Opportunities for Ascendas India and Avalon GloboCare

-0.08

Correlation Coefficient

Ascendas India  Avalon GloboCare

Good diversification

The 3 months correlation between Ascendas and Avalon is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Ascendas India Trust and Avalon GloboCare Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avalon GloboCare Corp and Ascendas India 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 India Trust are associated (or correlated) with Avalon GloboCare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avalon GloboCare Corp has no effect on the direction of Ascendas India i.e., Ascendas India and Avalon GloboCare go up and down completely randomly.

Pair Corralation between Ascendas India and Avalon GloboCare

Assuming the 90 days horizon Ascendas India Trust is expected to under-perform the Avalon GloboCare. But the pink sheet apears to be less risky and, when comparing its historical volatility, Ascendas India Trust is 10.79 times less risky than Avalon GloboCare. The pink sheet trades about -0.06 of its potential returns per unit of risk. The Avalon GloboCare Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  280.00  in Avalon GloboCare Corp on September 30, 2024 and sell it today you would earn a total of  49.00  from holding Avalon GloboCare Corp or generate 17.5% return on investment over 90 days.

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

Ascendas India Trust  vs.  Avalon GloboCare Corp

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.

Avalon GloboCare Corp

Risk-Adjusted Performance

5 of 100

Modest

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

Pair Trading with Ascendas India and Avalon GloboCare

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

The idea behind Ascendas India Trust and Avalon GloboCare Corp 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.