Correlation Between Addtech and Ashtead Group
Can any of the company-specific risk be diversified away by investing in both Addtech and Ashtead Group 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 Addtech and Ashtead Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addtech and Ashtead Group PLC, you can compare the effects of market volatilities on Addtech and Ashtead Group 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 Addtech with a short position of Ashtead Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addtech and Ashtead Group.
Diversification Opportunities for Addtech and Ashtead Group
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Addtech and Ashtead is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Addtech and Ashtead Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashtead Group PLC and Addtech 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 Addtech are associated (or correlated) with Ashtead Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashtead Group PLC has no effect on the direction of Addtech i.e., Addtech and Ashtead Group go up and down completely randomly.
Pair Corralation between Addtech and Ashtead Group
Assuming the 90 days trading horizon Addtech is expected to generate 1.03 times more return on investment than Ashtead Group. However, Addtech is 1.03 times more volatile than Ashtead Group PLC. It trades about 0.09 of its potential returns per unit of risk. Ashtead Group PLC is currently generating about 0.03 per unit of risk. If you would invest 19,120 in Addtech on September 14, 2024 and sell it today you would earn a total of 11,510 from holding Addtech or generate 60.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Addtech vs. Ashtead Group PLC
Performance |
| Timeline |
| Addtech |
| Ashtead Group PLC |
Addtech and Ashtead Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addtech and Ashtead Group
The main advantage of trading using opposite Addtech and Ashtead Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addtech position performs unexpectedly, Ashtead Group 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 Group will offset losses from the drop in Ashtead Group's long position.| Addtech vs. Monks Investment Trust | Addtech vs. Hansa Investment | Addtech vs. International Consolidated Airlines | Addtech vs. Schroders Investment Trusts |
| Ashtead Group vs. Lowland Investment Co | Ashtead Group vs. Addtech | Ashtead Group vs. Made Tech Group | Ashtead Group vs. Intuitive Investments Group |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |