Correlation Between Aarons and Ashtead Group
Can any of the company-specific risk be diversified away by investing in both Aarons 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 Aarons and Ashtead Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Aarons and Ashtead Group plc, you can compare the effects of market volatilities on Aarons 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 Aarons with a short position of Ashtead Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aarons and Ashtead Group.
Diversification Opportunities for Aarons and Ashtead Group
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Aarons and Ashtead is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding The Aarons 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 Aarons 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 The Aarons 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 Aarons i.e., Aarons and Ashtead Group go up and down completely randomly.
Pair Corralation between Aarons and Ashtead Group
If you would invest 1,009 in The Aarons on September 18, 2024 and sell it today you would earn a total of 0.00 from holding The Aarons or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 5.0% |
| Values | Daily Returns |
The Aarons vs. Ashtead Group plc
Performance |
| Timeline |
| Aarons |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| Ashtead Group plc |
Aarons and Ashtead Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aarons and Ashtead Group
The main advantage of trading using opposite Aarons and Ashtead Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aarons 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.| Aarons vs. Custom Truck One | Aarons vs. PROG Holdings | Aarons vs. McGrath RentCorp | Aarons vs. HE Equipment Services |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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