Correlation Between Ashtead Technology and Atalaya Mining
Can any of the company-specific risk be diversified away by investing in both Ashtead Technology and Atalaya Mining 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 Atalaya Mining 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 Atalaya Mining, you can compare the effects of market volatilities on Ashtead Technology and Atalaya Mining 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 Atalaya Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashtead Technology and Atalaya Mining.
Diversification Opportunities for Ashtead Technology and Atalaya Mining
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ashtead and Atalaya is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Ashtead Technology Holdings and Atalaya Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atalaya Mining 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 Atalaya Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atalaya Mining has no effect on the direction of Ashtead Technology i.e., Ashtead Technology and Atalaya Mining go up and down completely randomly.
Pair Corralation between Ashtead Technology and Atalaya Mining
Assuming the 90 days trading horizon Ashtead Technology Holdings is expected to generate 2.34 times more return on investment than Atalaya Mining. However, Ashtead Technology is 2.34 times more volatile than Atalaya Mining. It trades about -0.05 of its potential returns per unit of risk. Atalaya Mining is currently generating about -0.22 per unit of risk. If you would invest 58,700 in Ashtead Technology Holdings on November 5, 2024 and sell it today you would lose (3,700) from holding Ashtead Technology Holdings or give up 6.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashtead Technology Holdings vs. Atalaya Mining
Performance |
| Timeline |
| Ashtead Technology |
| Atalaya Mining |
Ashtead Technology and Atalaya Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashtead Technology and Atalaya Mining
The main advantage of trading using opposite Ashtead Technology and Atalaya Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashtead Technology position performs unexpectedly, Atalaya Mining 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 Atalaya Mining will offset losses from the drop in Atalaya Mining's long position.| Ashtead Technology vs. Zoom Video Communications | Ashtead Technology vs. Enbridge | Ashtead Technology vs. Endo International PLC | Ashtead Technology vs. Broadcom |
| Atalaya Mining vs. Givaudan SA | Atalaya Mining vs. Antofagasta PLC | Atalaya Mining vs. Ferrexpo PLC | Atalaya Mining vs. Amaroq Minerals |
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 Correlations module to find global opportunities by holding instruments from different markets.
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