Correlation Between Ashtead Gro and Localiza Rent
Can any of the company-specific risk be diversified away by investing in both Ashtead Gro and Localiza Rent 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 Localiza Rent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ashtead Gro and Localiza Rent A, you can compare the effects of market volatilities on Ashtead Gro and Localiza Rent 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 Localiza Rent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashtead Gro and Localiza Rent.
Diversification Opportunities for Ashtead Gro and Localiza Rent
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ashtead and Localiza is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Ashtead Gro and Localiza Rent A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Localiza Rent 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 Localiza Rent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Localiza Rent A has no effect on the direction of Ashtead Gro i.e., Ashtead Gro and Localiza Rent go up and down completely randomly.
Pair Corralation between Ashtead Gro and Localiza Rent
If you would invest 31,107 in Ashtead Gro on August 28, 2024 and sell it today you would earn a total of 1,396 from holding Ashtead Gro or generate 4.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Ashtead Gro vs. Localiza Rent A
Performance |
| Timeline |
| Ashtead Gro |
| Localiza Rent A |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Ashtead Gro and Localiza Rent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashtead Gro and Localiza Rent
The main advantage of trading using opposite Ashtead Gro and Localiza Rent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashtead Gro position performs unexpectedly, Localiza Rent 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 Localiza Rent will offset losses from the drop in Localiza Rent'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 |
| Localiza Rent vs. Hypera SA | Localiza Rent vs. Raia Drogasil SA | Localiza Rent vs. BB Seguridade Participacoes | Localiza Rent vs. Equatorial Energia 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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