Correlation Between Ashland Global and NewMarket

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Can any of the company-specific risk be diversified away by investing in both Ashland Global and NewMarket 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 Ashland Global and NewMarket into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ashland Global Holdings and NewMarket, you can compare the effects of market volatilities on Ashland Global and NewMarket 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 Ashland Global with a short position of NewMarket. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashland Global and NewMarket.

Diversification Opportunities for Ashland Global and NewMarket

AshlandNewMarketDiversified AwayAshlandNewMarketDiversified Away100%
0.57
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Ashland and NewMarket is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Ashland Global Holdings and NewMarket in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewMarket and Ashland Global 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 Ashland Global Holdings are associated (or correlated) with NewMarket. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NewMarket has no effect on the direction of Ashland Global i.e., Ashland Global and NewMarket go up and down completely randomly.

Pair Corralation between Ashland Global and NewMarket

Considering the 90-day investment horizon Ashland Global Holdings is expected to under-perform the NewMarket. In addition to that, Ashland Global is 1.12 times more volatile than NewMarket. It trades about -0.09 of its total potential returns per unit of risk. NewMarket is currently generating about -0.03 per unit of volatility. If you would invest  61,671  in NewMarket on November 21, 2024 and sell it today you would lose (7,427) from holding NewMarket or give up 12.04% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Ashland Global Holdings  vs.  NewMarket

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -25-20-15-10-50
JavaScript chart by amCharts 3.21.15ASH NEU
       Timeline  
Ashland Global Holdings 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Ashland Global Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in March 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb65707580
NewMarket 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in NewMarket are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, NewMarket is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb480490500510520530540550560

Ashland Global and NewMarket Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.39-2.54-1.69-0.84-0.01210.711.442.172.89 0.050.100.15
JavaScript chart by amCharts 3.21.15ASH NEU
       Returns  

Pair Trading with Ashland Global and NewMarket

The main advantage of trading using opposite Ashland Global and NewMarket positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashland Global position performs unexpectedly, NewMarket 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 NewMarket will offset losses from the drop in NewMarket's long position.
The idea behind Ashland Global Holdings and NewMarket pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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.

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