Correlation Between Ashtead Technology and Cembra Money
Can any of the company-specific risk be diversified away by investing in both Ashtead Technology and Cembra Money 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 Cembra Money 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 Cembra Money Bank, you can compare the effects of market volatilities on Ashtead Technology and Cembra Money 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 Cembra Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashtead Technology and Cembra Money.
Diversification Opportunities for Ashtead Technology and Cembra Money
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ashtead and Cembra is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Ashtead Technology Holdings and Cembra Money Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cembra Money Bank 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 Cembra Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cembra Money Bank has no effect on the direction of Ashtead Technology i.e., Ashtead Technology and Cembra Money go up and down completely randomly.
Pair Corralation between Ashtead Technology and Cembra Money
Assuming the 90 days trading horizon Ashtead Technology Holdings is expected to under-perform the Cembra Money. In addition to that, Ashtead Technology is 5.81 times more volatile than Cembra Money Bank. It trades about -0.04 of its total potential returns per unit of risk. Cembra Money Bank is currently generating about 0.41 per unit of volatility. If you would invest 8,396 in Cembra Money Bank on November 7, 2024 and sell it today you would earn a total of 572.00 from holding Cembra Money Bank or generate 6.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ashtead Technology Holdings vs. Cembra Money Bank
Performance |
| Timeline |
| Ashtead Technology |
| Cembra Money Bank |
Ashtead Technology and Cembra Money Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashtead Technology and Cembra Money
The main advantage of trading using opposite Ashtead Technology and Cembra Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashtead Technology position performs unexpectedly, Cembra Money 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 Cembra Money will offset losses from the drop in Cembra Money's long position.| Ashtead Technology vs. Pan American Silver | Ashtead Technology vs. Coeur Mining | Ashtead Technology vs. Impax Environmental Markets | Ashtead Technology vs. Air Products Chemicals |
| Cembra Money vs. Central Asia Metals | Cembra Money vs. URU Metals | Cembra Money vs. Wheaton Precious Metals | Cembra Money vs. Empire Metals Limited |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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