Correlation Between Ashtead Technology and Air Products
Can any of the company-specific risk be diversified away by investing in both Ashtead Technology and Air Products 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 Air Products 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 Air Products Chemicals, you can compare the effects of market volatilities on Ashtead Technology and Air Products 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 Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashtead Technology and Air Products.
Diversification Opportunities for Ashtead Technology and Air Products
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ashtead and Air is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Ashtead Technology Holdings and Air Products Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Products Chemicals 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 Air Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Products Chemicals has no effect on the direction of Ashtead Technology i.e., Ashtead Technology and Air Products go up and down completely randomly.
Pair Corralation between Ashtead Technology and Air Products
Assuming the 90 days trading horizon Ashtead Technology is expected to generate 1.28 times less return on investment than Air Products. In addition to that, Ashtead Technology is 2.71 times more volatile than Air Products Chemicals. It trades about 0.12 of its total potential returns per unit of risk. Air Products Chemicals is currently generating about 0.41 per unit of volatility. If you would invest 28,979 in Air Products Chemicals on October 29, 2024 and sell it today you would earn a total of 3,940 from holding Air Products Chemicals or generate 13.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashtead Technology Holdings vs. Air Products Chemicals
Performance |
| Timeline |
| Ashtead Technology |
| Air Products Chemicals |
Ashtead Technology and Air Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashtead Technology and Air Products
The main advantage of trading using opposite Ashtead Technology and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashtead Technology position performs unexpectedly, Air Products 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 Air Products will offset losses from the drop in Air Products' long position.| Ashtead Technology vs. Impax Asset Management | Ashtead Technology vs. Darden Restaurants | Ashtead Technology vs. Sunny Optical Technology | Ashtead Technology vs. Pfeiffer Vacuum Technology |
| Air Products vs. MTI Wireless Edge | Air Products vs. Infrastrutture Wireless Italiane | Air Products vs. Amedeo Air Four | Air Products vs. Discover Financial Services |
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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