Correlation Between Ashtead Group and Triton International
Can any of the company-specific risk be diversified away by investing in both Ashtead Group and Triton International 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 Triton International 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 Triton International Limited, you can compare the effects of market volatilities on Ashtead Group and Triton International 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 Triton International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashtead Group and Triton International.
Diversification Opportunities for Ashtead Group and Triton International
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ashtead and Triton is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Ashtead Group plc and Triton International Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triton International 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 Triton International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triton International has no effect on the direction of Ashtead Group i.e., Ashtead Group and Triton International go up and down completely randomly.
Pair Corralation between Ashtead Group and Triton International
Assuming the 90 days horizon Ashtead Group plc is expected to generate 5.71 times more return on investment than Triton International. However, Ashtead Group is 5.71 times more volatile than Triton International Limited. It trades about 0.02 of its potential returns per unit of risk. Triton International Limited is currently generating about 0.08 per unit of risk. If you would invest 6,348 in Ashtead Group plc on November 2, 2024 and sell it today you would earn a total of 227.00 from holding Ashtead Group plc or generate 3.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashtead Group plc vs. Triton International Limited
Performance |
| Timeline |
| Ashtead Group plc |
| Triton International |
Ashtead Group and Triton International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashtead Group and Triton International
The main advantage of trading using opposite Ashtead Group and Triton International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashtead Group position performs unexpectedly, Triton International 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 Triton International will offset losses from the drop in Triton International'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 |
| Triton International vs. Triton International Limited | Triton International vs. Triton International Limited | Triton International vs. Triton International Limited |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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