Correlation Between Ashtead Technology and Agilent Technologies
Can any of the company-specific risk be diversified away by investing in both Ashtead Technology and Agilent Technologies 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 Agilent Technologies 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 Agilent Technologies, you can compare the effects of market volatilities on Ashtead Technology and Agilent Technologies 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 Agilent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashtead Technology and Agilent Technologies.
Diversification Opportunities for Ashtead Technology and Agilent Technologies
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ashtead and Agilent is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Ashtead Technology Holdings and Agilent Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilent Technologies 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 Agilent Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agilent Technologies has no effect on the direction of Ashtead Technology i.e., Ashtead Technology and Agilent Technologies go up and down completely randomly.
Pair Corralation between Ashtead Technology and Agilent Technologies
Assuming the 90 days trading horizon Ashtead Technology Holdings is expected to generate 2.15 times more return on investment than Agilent Technologies. However, Ashtead Technology is 2.15 times more volatile than Agilent Technologies. It trades about -0.02 of its potential returns per unit of risk. Agilent Technologies is currently generating about -0.19 per unit of risk. If you would invest 56,100 in Ashtead Technology Holdings on October 10, 2024 and sell it today you would lose (800.00) from holding Ashtead Technology Holdings or give up 1.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Ashtead Technology Holdings vs. Agilent Technologies
Performance |
| Timeline |
| Ashtead Technology |
| Agilent Technologies |
Ashtead Technology and Agilent Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashtead Technology and Agilent Technologies
The main advantage of trading using opposite Ashtead Technology and Agilent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashtead Technology position performs unexpectedly, Agilent Technologies 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 Agilent Technologies will offset losses from the drop in Agilent Technologies' long position.| Ashtead Technology vs. BW Offshore | Ashtead Technology vs. MTI Wireless Edge | Ashtead Technology vs. Cornish Metals | Ashtead Technology vs. Martin Marietta Materials |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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