Correlation Between Ashtead Gro and Multi Ways
Can any of the company-specific risk be diversified away by investing in both Ashtead Gro and Multi Ways 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 Multi Ways into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ashtead Gro and Multi Ways Holdings, you can compare the effects of market volatilities on Ashtead Gro and Multi Ways 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 Multi Ways. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashtead Gro and Multi Ways.
Diversification Opportunities for Ashtead Gro and Multi Ways
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ashtead and Multi is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Ashtead Gro and Multi Ways Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Ways Holdings 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 Multi Ways. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Ways Holdings has no effect on the direction of Ashtead Gro i.e., Ashtead Gro and Multi Ways go up and down completely randomly.
Pair Corralation between Ashtead Gro and Multi Ways
Assuming the 90 days horizon Ashtead Gro is expected to generate 0.41 times more return on investment than Multi Ways. However, Ashtead Gro is 2.44 times less risky than Multi Ways. It trades about 0.18 of its potential returns per unit of risk. Multi Ways Holdings is currently generating about -0.02 per unit of risk. If you would invest 30,551 in Ashtead Gro on August 30, 2024 and sell it today you would earn a total of 2,032 from holding Ashtead Gro or generate 6.65% 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. Multi Ways Holdings
Performance |
| Timeline |
| Ashtead Gro |
| Multi Ways Holdings |
Ashtead Gro and Multi Ways Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashtead Gro and Multi Ways
The main advantage of trading using opposite Ashtead Gro and Multi Ways positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashtead Gro position performs unexpectedly, Multi Ways 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 Multi Ways will offset losses from the drop in Multi Ways' long position.| Ashtead Gro vs. United Rentals | Ashtead Gro vs. Ashtead Group plc | Ashtead Gro vs. AerCap Holdings NV | Ashtead Gro vs. Fortress Transp Infra |
| Multi Ways vs. FlexShopper | Multi Ways vs. Hertz Global Holdings | Multi Ways vs. HyreCar | Multi Ways vs. Avis Budget 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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