Correlation Between Private Equity and Ascom Holding

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

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

Diversification Opportunities for Private Equity and Ascom Holding

0.65

Correlation Coefficient

Private Equity  Ascom Holding

Poor diversification

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

Pair Corralation between Private Equity and Ascom Holding

Assuming the 90 days trading horizon Private Equity Holding is expected to generate 1.24 times more return on investment than Ascom Holding. However, Private Equity is 1.24 times more volatile than Ascom Holding AG. It trades about 0.33 of its potential returns per unit of risk. Ascom Holding AG is currently generating about 0.24 per unit of risk. 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

Private Equity Holding  vs.  Ascom Holding AG

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.

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.

Pair Trading with Private Equity and Ascom Holding

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

The idea behind Private Equity Holding and Ascom Holding AG 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.