Correlation Between Asia Pptys and Ascendas India

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

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

Diversification Opportunities for Asia Pptys and Ascendas India

0.45

Correlation Coefficient

Asia Pptys  Ascendas India

Very weak diversification

The 3 months correlation between Asia and Ascendas is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Asia Pptys and Ascendas India Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascendas India Trust and Asia Pptys 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 Asia Pptys are associated (or correlated) with Ascendas India. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascendas India Trust has no effect on the direction of Asia Pptys i.e., Asia Pptys and Ascendas India go up and down completely randomly.

Pair Corralation between Asia Pptys and Ascendas India

Given the investment horizon of 90 days Asia Pptys is expected to under-perform the Ascendas India. In addition to that, Asia Pptys is 3.5 times more volatile than Ascendas India Trust. It trades about -0.25 of its total potential returns per unit of risk. Ascendas India Trust is currently generating about 0.09 per unit of volatility. If you would invest  75.00  in Ascendas India Trust on September 13, 2024 and sell it today you would earn a total of  3.00  from holding Ascendas India Trust or generate 4.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Asia Pptys  vs.  Ascendas India Trust

Asia Pptys

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asia Pptys has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

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.

Pair Trading with Asia Pptys and Ascendas India

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

The idea behind Asia Pptys and Ascendas India 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.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.