Correlation Between Ashtead Group and ELEMENT FLEET
Can any of the company-specific risk be diversified away by investing in both Ashtead Group and ELEMENT FLEET 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 Ashtead Group and ELEMENT FLEET into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ashtead Group plc and ELEMENT FLEET MGMT, you can compare the effects of market volatilities on Ashtead Group and ELEMENT FLEET 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 Ashtead Group with a short position of ELEMENT FLEET. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashtead Group and ELEMENT FLEET.
Diversification Opportunities for Ashtead Group and ELEMENT FLEET
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ashtead and ELEMENT is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Ashtead Group plc and ELEMENT FLEET MGMT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELEMENT FLEET MGMT and Ashtead Group 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 Ashtead Group plc are associated (or correlated) with ELEMENT FLEET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ELEMENT FLEET MGMT has no effect on the direction of Ashtead Group i.e., Ashtead Group and ELEMENT FLEET go up and down completely randomly.
Pair Corralation between Ashtead Group and ELEMENT FLEET
Assuming the 90 days horizon Ashtead Group plc is expected to generate 0.79 times more return on investment than ELEMENT FLEET. However, Ashtead Group plc is 1.27 times less risky than ELEMENT FLEET. It trades about 0.18 of its potential returns per unit of risk. ELEMENT FLEET MGMT is currently generating about 0.07 per unit of risk. If you would invest 6,350 in Ashtead Group plc on September 2, 2024 and sell it today you would earn a total of 1,200 from holding Ashtead Group plc or generate 18.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashtead Group plc vs. ELEMENT FLEET MGMT
Performance |
| Timeline |
| Ashtead Group plc |
| ELEMENT FLEET MGMT |
Ashtead Group and ELEMENT FLEET Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashtead Group and ELEMENT FLEET
The main advantage of trading using opposite Ashtead Group and ELEMENT FLEET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashtead Group position performs unexpectedly, ELEMENT FLEET 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 ELEMENT FLEET will offset losses from the drop in ELEMENT FLEET's long position.| Ashtead Group vs. MOVIE GAMES SA | Ashtead Group vs. Ares Management Corp | Ashtead Group vs. Perdoceo Education | Ashtead Group vs. Sims Metal Management |
| ELEMENT FLEET vs. Microbot Medical | ELEMENT FLEET vs. FUYO GENERAL LEASE | ELEMENT FLEET vs. Carsales | ELEMENT FLEET vs. Merit Medical Systems |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |