Correlation Between Ashtead Group and FlexShopper
Can any of the company-specific risk be diversified away by investing in both Ashtead Group and FlexShopper 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 FlexShopper 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 FlexShopper, you can compare the effects of market volatilities on Ashtead Group and FlexShopper 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 FlexShopper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashtead Group and FlexShopper.
Diversification Opportunities for Ashtead Group and FlexShopper
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ashtead and FlexShopper is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Ashtead Group plc and FlexShopper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FlexShopper 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 FlexShopper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FlexShopper has no effect on the direction of Ashtead Group i.e., Ashtead Group and FlexShopper go up and down completely randomly.
Pair Corralation between Ashtead Group and FlexShopper
Assuming the 90 days horizon Ashtead Group is expected to generate 2.45 times less return on investment than FlexShopper. But when comparing it to its historical volatility, Ashtead Group plc is 2.03 times less risky than FlexShopper. It trades about 0.04 of its potential returns per unit of risk. FlexShopper is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 103.00 in FlexShopper on August 30, 2024 and sell it today you would earn a total of 82.00 from holding FlexShopper or generate 79.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.59% |
| Values | Daily Returns |
Ashtead Group plc vs. FlexShopper
Performance |
| Timeline |
| Ashtead Group plc |
| FlexShopper |
Ashtead Group and FlexShopper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashtead Group and FlexShopper
The main advantage of trading using opposite Ashtead Group and FlexShopper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashtead Group position performs unexpectedly, FlexShopper 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 FlexShopper will offset losses from the drop in FlexShopper'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 |
| FlexShopper vs. AZN Capital Corp | FlexShopper vs. Fortress Transportation and | FlexShopper vs. Ashtead Gro | FlexShopper vs. Alta Equipment Group |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |