Correlation Between Ashtead Technology and Omnicom
Can any of the company-specific risk be diversified away by investing in both Ashtead Technology and Omnicom 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 Omnicom 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 Omnicom Group, you can compare the effects of market volatilities on Ashtead Technology and Omnicom 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 Omnicom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashtead Technology and Omnicom.
Diversification Opportunities for Ashtead Technology and Omnicom
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ashtead and Omnicom is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Ashtead Technology Holdings and Omnicom Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omnicom Group 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 Omnicom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omnicom Group has no effect on the direction of Ashtead Technology i.e., Ashtead Technology and Omnicom go up and down completely randomly.
Pair Corralation between Ashtead Technology and Omnicom
Assuming the 90 days trading horizon Ashtead Technology Holdings is expected to generate 0.71 times more return on investment than Omnicom. However, Ashtead Technology Holdings is 1.41 times less risky than Omnicom. It trades about 0.15 of its potential returns per unit of risk. Omnicom Group is currently generating about -0.17 per unit of risk. If you would invest 50,200 in Ashtead Technology Holdings on September 13, 2024 and sell it today you would earn a total of 3,100 from holding Ashtead Technology Holdings or generate 6.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Ashtead Technology Holdings vs. Omnicom Group
Performance |
| Timeline |
| Ashtead Technology |
| Omnicom Group |
Ashtead Technology and Omnicom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashtead Technology and Omnicom
The main advantage of trading using opposite Ashtead Technology and Omnicom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashtead Technology position performs unexpectedly, Omnicom 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 Omnicom will offset losses from the drop in Omnicom's long position.| Ashtead Technology vs. Zoom Video Communications | Ashtead Technology vs. Enbridge | Ashtead Technology vs. Endo International PLC | Ashtead Technology vs. Blue Star Capital |
| Omnicom vs. Herald Investment Trust | Omnicom vs. Impax Environmental Markets | Omnicom vs. Schroders Investment Trusts | Omnicom vs. Monks Investment Trust |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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