Correlation Between Ashtead Technology and Atresmedia
Can any of the company-specific risk be diversified away by investing in both Ashtead Technology and Atresmedia 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 Atresmedia 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 Atresmedia, you can compare the effects of market volatilities on Ashtead Technology and Atresmedia 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 Atresmedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashtead Technology and Atresmedia.
Diversification Opportunities for Ashtead Technology and Atresmedia
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ashtead and Atresmedia is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Ashtead Technology Holdings and Atresmedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atresmedia 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 Atresmedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atresmedia has no effect on the direction of Ashtead Technology i.e., Ashtead Technology and Atresmedia go up and down completely randomly.
Pair Corralation between Ashtead Technology and Atresmedia
Assuming the 90 days trading horizon Ashtead Technology Holdings is expected to generate 1.46 times more return on investment than Atresmedia. However, Ashtead Technology is 1.46 times more volatile than Atresmedia. It trades about 0.02 of its potential returns per unit of risk. Atresmedia is currently generating about -0.05 per unit of risk. If you would invest 53,200 in Ashtead Technology Holdings on October 11, 2024 and sell it today you would earn a total of 300.00 from holding Ashtead Technology Holdings or generate 0.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashtead Technology Holdings vs. Atresmedia
Performance |
| Timeline |
| Ashtead Technology |
| Atresmedia |
Ashtead Technology and Atresmedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashtead Technology and Atresmedia
The main advantage of trading using opposite Ashtead Technology and Atresmedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashtead Technology position performs unexpectedly, Atresmedia 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 Atresmedia will offset losses from the drop in Atresmedia's long position.| Ashtead Technology vs. Allianz Technology Trust | Ashtead Technology vs. Empire Metals Limited | Ashtead Technology vs. Symphony Environmental Technologies | Ashtead Technology vs. PureTech Health plc |
| Atresmedia vs. Sligro Food Group | Atresmedia vs. Ashtead Technology Holdings | Atresmedia vs. Allianz Technology Trust | Atresmedia vs. Celebrus Technologies plc |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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