Correlation Between Ascom Holding and Private Equity

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

By analyzing existing cross correlation between Ascom Holding AG and Private Equity Holding, you can compare the effects of market volatilities on Ascom Holding and Private Equity 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 Ascom Holding with a short position of Private Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ascom Holding and Private Equity.

Diversification Opportunities for Ascom Holding and Private Equity

0.65

Correlation Coefficient

Ascom Holding  Private Equity

Poor diversification

The 3 months correlation between Ascom and Private is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Ascom Holding AG and Private Equity Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Private Equity Holding and Ascom Holding 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 Ascom Holding AG are associated (or correlated) with Private Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Private Equity Holding has no effect on the direction of Ascom Holding i.e., Ascom Holding and Private Equity go up and down completely randomly.

Pair Corralation between Ascom Holding and Private Equity

Assuming the 90 days trading horizon Ascom Holding is expected to generate 1.74 times less return on investment than Private Equity. But when comparing it to its historical volatility, Ascom Holding AG is 1.24 times less risky than Private Equity. It trades about 0.24 of its potential returns per unit of risk. Private Equity Holding is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest  7,080  in Private Equity Holding on March 4, 2024 and sell it today you would earn a total of  600.00  from holding Private Equity Holding or generate 8.47% return on investment over 90 days.

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

Ascom Holding AG  vs.  Private Equity Holding

Ascom Holding AG

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ascom Holding AG are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Ascom Holding showed solid returns over the last few months and may actually be approaching a breakup point.

Private Equity Holding

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Private Equity Holding are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Private Equity showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ascom Holding and Private Equity

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

The idea behind Ascom Holding AG and Private Equity Holding 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.