Correlation Between Ashtead Group and WILLIS LEASE
Can any of the company-specific risk be diversified away by investing in both Ashtead Group and WILLIS LEASE 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 WILLIS LEASE 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 WILLIS LEASE FIN, you can compare the effects of market volatilities on Ashtead Group and WILLIS LEASE 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 WILLIS LEASE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashtead Group and WILLIS LEASE.
Diversification Opportunities for Ashtead Group and WILLIS LEASE
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ashtead and WILLIS is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Ashtead Group plc and WILLIS LEASE FIN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WILLIS LEASE FIN 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 WILLIS LEASE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WILLIS LEASE FIN has no effect on the direction of Ashtead Group i.e., Ashtead Group and WILLIS LEASE go up and down completely randomly.
Pair Corralation between Ashtead Group and WILLIS LEASE
Assuming the 90 days horizon Ashtead Group is expected to generate 5.83 times less return on investment than WILLIS LEASE. But when comparing it to its historical volatility, Ashtead Group plc is 1.45 times less risky than WILLIS LEASE. It trades about 0.04 of its potential returns per unit of risk. WILLIS LEASE FIN is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 3,801 in WILLIS LEASE FIN on August 31, 2024 and sell it today you would earn a total of 16,799 from holding WILLIS LEASE FIN or generate 441.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashtead Group plc vs. WILLIS LEASE FIN
Performance |
| Timeline |
| Ashtead Group plc |
| WILLIS LEASE FIN |
Ashtead Group and WILLIS LEASE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashtead Group and WILLIS LEASE
The main advantage of trading using opposite Ashtead Group and WILLIS LEASE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashtead Group position performs unexpectedly, WILLIS LEASE 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 WILLIS LEASE will offset losses from the drop in WILLIS LEASE's long position.| Ashtead Group vs. HYATT HOTELS A | Ashtead Group vs. Fevertree Drinks PLC | Ashtead Group vs. Xenia Hotels Resorts | Ashtead Group vs. BOSTON BEER A |
| WILLIS LEASE vs. National Storage Affiliates | WILLIS LEASE vs. DATANG INTL POW | WILLIS LEASE vs. BE Semiconductor Industries | WILLIS LEASE vs. Hyrican Informationssysteme Aktiengesellschaft |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |