Correlation Between Kellogg and Ashtead Technology
Can any of the company-specific risk be diversified away by investing in both Kellogg 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 Kellogg and Ashtead Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kellogg Co and Ashtead Technology Holdings, you can compare the effects of market volatilities on Kellogg 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 Kellogg with a short position of Ashtead Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kellogg and Ashtead Technology.
Diversification Opportunities for Kellogg and Ashtead Technology
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kellogg and Ashtead is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Kellogg Co and Ashtead Technology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashtead Technology and Kellogg 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 Kellogg Co 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 Kellogg i.e., Kellogg and Ashtead Technology go up and down completely randomly.
Pair Corralation between Kellogg and Ashtead Technology
Assuming the 90 days trading horizon Kellogg is expected to generate 17.41 times less return on investment than Ashtead Technology. But when comparing it to its historical volatility, Kellogg Co is 6.56 times less risky than Ashtead Technology. It trades about 0.04 of its potential returns per unit of risk. Ashtead Technology Holdings is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 51,300 in Ashtead Technology Holdings on September 12, 2024 and sell it today you would earn a total of 2,000 from holding Ashtead Technology Holdings or generate 3.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Kellogg Co vs. Ashtead Technology Holdings
Performance |
| Timeline |
| Kellogg |
| Ashtead Technology |
Kellogg and Ashtead Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kellogg and Ashtead Technology
The main advantage of trading using opposite Kellogg and Ashtead Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kellogg 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.| Kellogg vs. Monks Investment Trust | Kellogg vs. Bankers Investment Trust | Kellogg vs. Federal Realty Investment | Kellogg vs. McEwen Mining |
| Ashtead Technology vs. Zoom Video Communications | Ashtead Technology vs. Neometals | Ashtead Technology vs. Coor Service Management | Ashtead Technology vs. Fidelity Sustainable USD |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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