Correlation Between Ashtead Group and Aarons
Can any of the company-specific risk be diversified away by investing in both Ashtead Group and Aarons 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 Ashtead Group and Aarons into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ashtead Group plc and The Aarons, you can compare the effects of market volatilities on Ashtead Group and Aarons 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 Ashtead Group with a short position of Aarons. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashtead Group and Aarons.
Diversification Opportunities for Ashtead Group and Aarons
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ashtead and Aarons is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Ashtead Group plc and The Aarons in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aarons and Ashtead Group 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 Ashtead Group plc are associated (or correlated) with Aarons. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aarons has no effect on the direction of Ashtead Group i.e., Ashtead Group and Aarons go up and down completely randomly.
Pair Corralation between Ashtead Group and Aarons
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 | Very Weak |
| Accuracy | 5.0% |
| Values | Daily Returns |
Ashtead Group plc vs. The Aarons
Performance |
| Timeline |
| Ashtead Group plc |
| Aarons |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Ashtead Group and Aarons Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashtead Group and Aarons
The main advantage of trading using opposite Ashtead Group and Aarons positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashtead Group position performs unexpectedly, Aarons 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 Aarons will offset losses from the drop in Aarons' long position.| Ashtead Group vs. United Rentals | Ashtead Group vs. AerCap Holdings NV | Ashtead Group vs. Fortress Transp Infra | Ashtead Group vs. U Haul Holding |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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