Correlation Between Ashtead Gro and Coloplast
Can any of the company-specific risk be diversified away by investing in both Ashtead Gro and Coloplast 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 Gro and Coloplast into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ashtead Gro and Coloplast A, you can compare the effects of market volatilities on Ashtead Gro and Coloplast 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 Gro with a short position of Coloplast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashtead Gro and Coloplast.
Diversification Opportunities for Ashtead Gro and Coloplast
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ashtead and Coloplast is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Ashtead Gro and Coloplast A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coloplast A and Ashtead Gro 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 Gro are associated (or correlated) with Coloplast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coloplast A has no effect on the direction of Ashtead Gro i.e., Ashtead Gro and Coloplast go up and down completely randomly.
Pair Corralation between Ashtead Gro and Coloplast
Assuming the 90 days horizon Ashtead Gro is expected to generate 1.29 times more return on investment than Coloplast. However, Ashtead Gro is 1.29 times more volatile than Coloplast A. It trades about 0.08 of its potential returns per unit of risk. Coloplast A is currently generating about 0.05 per unit of risk. If you would invest 27,842 in Ashtead Gro on September 1, 2024 and sell it today you would earn a total of 4,630 from holding Ashtead Gro or generate 16.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashtead Gro vs. Coloplast A
Performance |
| Timeline |
| Ashtead Gro |
| Coloplast A |
Ashtead Gro and Coloplast Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashtead Gro and Coloplast
The main advantage of trading using opposite Ashtead Gro and Coloplast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashtead Gro position performs unexpectedly, Coloplast 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 Coloplast will offset losses from the drop in Coloplast's long position.| Ashtead Gro vs. African Discovery Group | Ashtead Gro vs. BOC Aviation Limited | Ashtead Gro vs. Black Diamond Group | Ashtead Gro vs. Alta Equipment Group |
| Coloplast vs. Straumann Holding AG | Coloplast vs. Hoya Corp | Coloplast vs. EssilorLuxottica Socit anonyme | Coloplast vs. Essilor International SA |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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