Correlation Between Ashtead Group and China Aircraft
Can any of the company-specific risk be diversified away by investing in both Ashtead Group and China Aircraft 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 China Aircraft 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 China Aircraft Leasing, you can compare the effects of market volatilities on Ashtead Group and China Aircraft 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 China Aircraft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashtead Group and China Aircraft.
Diversification Opportunities for Ashtead Group and China Aircraft
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ashtead and China is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Ashtead Group plc and China Aircraft Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Aircraft Leasing 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 China Aircraft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Aircraft Leasing has no effect on the direction of Ashtead Group i.e., Ashtead Group and China Aircraft go up and down completely randomly.
Pair Corralation between Ashtead Group and China Aircraft
If you would invest 7,655 in Ashtead Group plc on August 26, 2024 and sell it today you would earn a total of 452.00 from holding Ashtead Group plc or generate 5.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashtead Group plc vs. China Aircraft Leasing
Performance |
| Timeline |
| Ashtead Group plc |
| China Aircraft Leasing |
Ashtead Group and China Aircraft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashtead Group and China Aircraft
The main advantage of trading using opposite Ashtead Group and China Aircraft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashtead Group position performs unexpectedly, China Aircraft 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 China Aircraft will offset losses from the drop in China Aircraft's long position.| Ashtead Group vs. African Discovery Group | Ashtead Group vs. Emeco Holdings Limited | Ashtead Group vs. Solution Financial | Ashtead Group vs. BOC Aviation Limited |
| China Aircraft vs. Analog Devices | China Aircraft vs. Marti Technologies | China Aircraft vs. Lipocine | China Aircraft vs. Payoneer Global |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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