Correlation Between Ashtead Group and Emeco Holdings
Can any of the company-specific risk be diversified away by investing in both Ashtead Group and Emeco Holdings 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 Emeco Holdings 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 Emeco Holdings Limited, you can compare the effects of market volatilities on Ashtead Group and Emeco Holdings 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 Emeco Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashtead Group and Emeco Holdings.
Diversification Opportunities for Ashtead Group and Emeco Holdings
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ashtead and Emeco is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ashtead Group plc and Emeco Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emeco Holdings 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 Emeco Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emeco Holdings has no effect on the direction of Ashtead Group i.e., Ashtead Group and Emeco Holdings go up and down completely randomly.
Pair Corralation between Ashtead Group and Emeco Holdings
If you would invest 7,580 in Ashtead Group plc on August 30, 2024 and sell it today you would earn a total of 405.00 from holding Ashtead Group plc or generate 5.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashtead Group plc vs. Emeco Holdings Limited
Performance |
| Timeline |
| Ashtead Group plc |
| Emeco Holdings |
Ashtead Group and Emeco Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashtead Group and Emeco Holdings
The main advantage of trading using opposite Ashtead Group and Emeco Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashtead Group position performs unexpectedly, Emeco Holdings 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 Emeco Holdings will offset losses from the drop in Emeco Holdings' 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 |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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