Correlation Between Ashland Global and Select Energy
Can any of the company-specific risk be diversified away by investing in both Ashland Global and Select Energy 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 Select Energy 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 Select Energy Services, you can compare the effects of market volatilities on Ashland Global and Select Energy 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 Select Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashland Global and Select Energy.
Diversification Opportunities for Ashland Global and Select Energy
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ashland and Select is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Ashland Global Holdings and Select Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Select Energy Services 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 Select Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Select Energy Services has no effect on the direction of Ashland Global i.e., Ashland Global and Select Energy go up and down completely randomly.
Pair Corralation between Ashland Global and Select Energy
Considering the 90-day investment horizon Ashland Global Holdings is expected to under-perform the Select Energy. But the stock apears to be less risky and, when comparing its historical volatility, Ashland Global Holdings is 2.66 times less risky than Select Energy. The stock trades about -0.14 of its potential returns per unit of risk. The Select Energy Services is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 1,072 in Select Energy Services on August 27, 2024 and sell it today you would earn a total of 397.00 from holding Select Energy Services or generate 37.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashland Global Holdings vs. Select Energy Services
Performance |
| Timeline |
| Ashland Global Holdings |
| Select Energy Services |
Ashland Global and Select Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashland Global and Select Energy
The main advantage of trading using opposite Ashland Global and Select Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashland Global position performs unexpectedly, Select Energy 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 Select Energy will offset losses from the drop in Select Energy's long position.| Ashland Global vs. H B Fuller | Ashland Global vs. Element Solutions | Ashland Global vs. Balchem | Ashland Global vs. Avantor |
| Select Energy vs. ProPetro Holding Corp | Select Energy vs. RPC Inc | Select Energy vs. MRC Global | Select Energy vs. Expro Group Holdings |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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