Correlation Between Ashtead Technology and National Beverage
Can any of the company-specific risk be diversified away by investing in both Ashtead Technology and National Beverage 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 National Beverage 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 National Beverage Corp, you can compare the effects of market volatilities on Ashtead Technology and National Beverage 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 National Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashtead Technology and National Beverage.
Diversification Opportunities for Ashtead Technology and National Beverage
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ashtead and National is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Ashtead Technology Holdings and National Beverage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Beverage Corp 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 National Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Beverage Corp has no effect on the direction of Ashtead Technology i.e., Ashtead Technology and National Beverage go up and down completely randomly.
Pair Corralation between Ashtead Technology and National Beverage
Assuming the 90 days trading horizon Ashtead Technology Holdings is expected to generate 1.83 times more return on investment than National Beverage. However, Ashtead Technology is 1.83 times more volatile than National Beverage Corp. It trades about 0.09 of its potential returns per unit of risk. National Beverage Corp is currently generating about -0.08 per unit of risk. If you would invest 55,000 in Ashtead Technology Holdings on October 26, 2024 and sell it today you would earn a total of 8,200 from holding Ashtead Technology Holdings or generate 14.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.39% |
| Values | Daily Returns |
Ashtead Technology Holdings vs. National Beverage Corp
Performance |
| Timeline |
| Ashtead Technology |
| National Beverage Corp |
Ashtead Technology and National Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashtead Technology and National Beverage
The main advantage of trading using opposite Ashtead Technology and National Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashtead Technology position performs unexpectedly, National Beverage 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 National Beverage will offset losses from the drop in National Beverage's long position.| Ashtead Technology vs. Zoom Video Communications | Ashtead Technology vs. Enbridge | Ashtead Technology vs. Endo International PLC | Ashtead Technology vs. Smithson Investment Trust |
| National Beverage vs. Berkshire Hathaway | National Beverage vs. Samsung Electronics Co | National Beverage vs. Samsung Electronics Co | National Beverage vs. Chocoladefabriken Lindt Spruengli |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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