Correlation Between Pfeiffer Vacuum and Ashtead Technology
Can any of the company-specific risk be diversified away by investing in both Pfeiffer Vacuum and Ashtead Technology 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 Pfeiffer Vacuum and Ashtead Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfeiffer Vacuum Technology and Ashtead Technology Holdings, you can compare the effects of market volatilities on Pfeiffer Vacuum and Ashtead Technology 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 Pfeiffer Vacuum with a short position of Ashtead Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfeiffer Vacuum and Ashtead Technology.
Diversification Opportunities for Pfeiffer Vacuum and Ashtead Technology
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pfeiffer and Ashtead is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Pfeiffer Vacuum Technology and Ashtead Technology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashtead Technology and Pfeiffer Vacuum 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 Pfeiffer Vacuum Technology are associated (or correlated) with Ashtead Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashtead Technology has no effect on the direction of Pfeiffer Vacuum i.e., Pfeiffer Vacuum and Ashtead Technology go up and down completely randomly.
Pair Corralation between Pfeiffer Vacuum and Ashtead Technology
Assuming the 90 days trading horizon Pfeiffer Vacuum Technology is expected to under-perform the Ashtead Technology. But the stock apears to be less risky and, when comparing its historical volatility, Pfeiffer Vacuum Technology is 6.33 times less risky than Ashtead Technology. The stock trades about -0.24 of its potential returns per unit of risk. The Ashtead Technology Holdings is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 48,500 in Ashtead Technology Holdings on September 21, 2024 and sell it today you would earn a total of 3,200 from holding Ashtead Technology Holdings or generate 6.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pfeiffer Vacuum Technology vs. Ashtead Technology Holdings
Performance |
| Timeline |
| Pfeiffer Vacuum Tech |
| Ashtead Technology |
Pfeiffer Vacuum and Ashtead Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfeiffer Vacuum and Ashtead Technology
The main advantage of trading using opposite Pfeiffer Vacuum and Ashtead Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfeiffer Vacuum position performs unexpectedly, Ashtead Technology 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 Ashtead Technology will offset losses from the drop in Ashtead Technology's long position.| Pfeiffer Vacuum vs. Samsung Electronics Co | Pfeiffer Vacuum vs. Samsung Electronics Co | Pfeiffer Vacuum vs. Hyundai Motor | Pfeiffer Vacuum vs. Reliance Industries Ltd |
| Ashtead Technology vs. Zoom Video Communications | Ashtead Technology vs. Enbridge | Ashtead Technology vs. Endo International PLC | Ashtead Technology vs. Blue Star Capital |
Check out your portfolio center.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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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