Correlation Between Ashtead Technology and Auction Technology
Can any of the company-specific risk be diversified away by investing in both Ashtead Technology and Auction Technology 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 Auction Technology 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 Auction Technology Group, you can compare the effects of market volatilities on Ashtead Technology and Auction Technology 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 Auction Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashtead Technology and Auction Technology.
Diversification Opportunities for Ashtead Technology and Auction Technology
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ashtead and Auction is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Ashtead Technology Holdings and Auction Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auction Technology 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 Auction Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auction Technology has no effect on the direction of Ashtead Technology i.e., Ashtead Technology and Auction Technology go up and down completely randomly.
Pair Corralation between Ashtead Technology and Auction Technology
Assuming the 90 days trading horizon Ashtead Technology Holdings is expected to under-perform the Auction Technology. But the stock apears to be less risky and, when comparing its historical volatility, Ashtead Technology Holdings is 1.13 times less risky than Auction Technology. The stock trades about -0.01 of its potential returns per unit of risk. The Auction Technology Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 52,100 in Auction Technology Group on September 12, 2024 and sell it today you would earn a total of 4,400 from holding Auction Technology Group or generate 8.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashtead Technology Holdings vs. Auction Technology Group
Performance |
| Timeline |
| Ashtead Technology |
| Auction Technology |
Ashtead Technology and Auction Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashtead Technology and Auction Technology
The main advantage of trading using opposite Ashtead Technology and Auction Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashtead Technology position performs unexpectedly, Auction Technology 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 Auction Technology will offset losses from the drop in Auction Technology's long position.| Ashtead Technology vs. Zoom Video Communications | Ashtead Technology vs. Neometals | Ashtead Technology vs. Coor Service Management | Ashtead Technology vs. Fidelity Sustainable USD |
| Auction Technology vs. Home Depot | Auction Technology vs. Chrysalis Investments | Auction Technology vs. Neometals | Auction Technology vs. Coor Service Management |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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