Correlation Between Ashtead Technology and Sligro Food
Can any of the company-specific risk be diversified away by investing in both Ashtead Technology and Sligro Food 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 Sligro Food 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 Sligro Food Group, you can compare the effects of market volatilities on Ashtead Technology and Sligro Food 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 Sligro Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashtead Technology and Sligro Food.
Diversification Opportunities for Ashtead Technology and Sligro Food
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ashtead and Sligro is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Ashtead Technology Holdings and Sligro Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sligro Food 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 Sligro Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sligro Food Group has no effect on the direction of Ashtead Technology i.e., Ashtead Technology and Sligro Food go up and down completely randomly.
Pair Corralation between Ashtead Technology and Sligro Food
Assuming the 90 days trading horizon Ashtead Technology Holdings is expected to generate 2.15 times more return on investment than Sligro Food. However, Ashtead Technology is 2.15 times more volatile than Sligro Food Group. It trades about 0.03 of its potential returns per unit of risk. Sligro Food Group is currently generating about -0.08 per unit of risk. If you would invest 54,500 in Ashtead Technology Holdings on November 1, 2024 and sell it today you would earn a total of 1,900 from holding Ashtead Technology Holdings or generate 3.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashtead Technology Holdings vs. Sligro Food Group
Performance |
| Timeline |
| Ashtead Technology |
| Sligro Food Group |
Ashtead Technology and Sligro Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashtead Technology and Sligro Food
The main advantage of trading using opposite Ashtead Technology and Sligro Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashtead Technology position performs unexpectedly, Sligro Food 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 Sligro Food will offset losses from the drop in Sligro Food's long position.| Ashtead Technology vs. Batm Advanced Communications | Ashtead Technology vs. Pets at Home | Ashtead Technology vs. Mobile Tornado Group | Ashtead Technology vs. DFS Furniture PLC |
| Sligro Food vs. Batm Advanced Communications | Sligro Food vs. Inspiration Healthcare Group | Sligro Food vs. Gamma Communications PLC | Sligro Food vs. Lindsell Train Investment |
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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