Correlation Between Ashtead Technology and Ion Beam
Can any of the company-specific risk be diversified away by investing in both Ashtead Technology and Ion Beam 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 Technology and Ion Beam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ashtead Technology Holdings and Ion Beam Applications, you can compare the effects of market volatilities on Ashtead Technology and Ion Beam 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 Technology with a short position of Ion Beam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashtead Technology and Ion Beam.
Diversification Opportunities for Ashtead Technology and Ion Beam
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ashtead and Ion is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Ashtead Technology Holdings and Ion Beam Applications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ion Beam Applications and Ashtead Technology 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 Technology Holdings are associated (or correlated) with Ion Beam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ion Beam Applications has no effect on the direction of Ashtead Technology i.e., Ashtead Technology and Ion Beam go up and down completely randomly.
Pair Corralation between Ashtead Technology and Ion Beam
Assuming the 90 days trading horizon Ashtead Technology Holdings is expected to generate 2.01 times more return on investment than Ion Beam. However, Ashtead Technology is 2.01 times more volatile than Ion Beam Applications. It trades about 0.02 of its potential returns per unit of risk. Ion Beam Applications is currently generating about -0.1 per unit of risk. If you would invest 53,300 in Ashtead Technology Holdings on October 12, 2024 and sell it today you would earn a total of 200.00 from holding Ashtead Technology Holdings or generate 0.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Ashtead Technology Holdings vs. Ion Beam Applications
Performance |
| Timeline |
| Ashtead Technology |
| Ion Beam Applications |
Ashtead Technology and Ion Beam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashtead Technology and Ion Beam
The main advantage of trading using opposite Ashtead Technology and Ion Beam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashtead Technology position performs unexpectedly, Ion Beam 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 Ion Beam will offset losses from the drop in Ion Beam's long position.| Ashtead Technology vs. CNH Industrial NV | Ashtead Technology vs. Jacquet Metal Service | Ashtead Technology vs. Lundin Mining Corp | Ashtead Technology vs. Foresight Environmental Infrastructure |
| Ion Beam vs. Ashtead Technology Holdings | Ion Beam vs. Polar Capital Technology | Ion Beam vs. Cars Inc | Ion Beam vs. Sartorius Stedim Biotech |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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