Correlation Between Ascendis Pharma and Exelixis

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

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

Diversification Opportunities for Ascendis Pharma and Exelixis

-0.28

Correlation Coefficient

Ascendis Pharma  Exelixis

Very good diversification

The 3 months correlation between Ascendis and Exelixis is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Ascendis Pharma AS and Exelixis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exelixis and Ascendis Pharma 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 Ascendis Pharma AS are associated (or correlated) with Exelixis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exelixis has no effect on the direction of Ascendis Pharma i.e., Ascendis Pharma and Exelixis go up and down completely randomly.

Pair Corralation between Ascendis Pharma and Exelixis

Given the investment horizon of 90 days Ascendis Pharma AS is expected to generate 1.63 times more return on investment than Exelixis. However, Ascendis Pharma is 1.63 times more volatile than Exelixis. It trades about 0.14 of its potential returns per unit of risk. Exelixis is currently generating about 0.14 per unit of risk. If you would invest  12,577  in Ascendis Pharma AS on September 4, 2024 and sell it today you would earn a total of  774.00  from holding Ascendis Pharma AS or generate 6.15% return on investment over 90 days.

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

Ascendis Pharma AS  vs.  Exelixis

Ascendis Pharma AS

Risk-Adjusted Performance

5 of 100

Modest

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

Exelixis

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Exelixis are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite quite weak technical and fundamental indicators, Exelixis disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ascendis Pharma and Exelixis

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

The idea behind Ascendis Pharma AS and Exelixis 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.