Correlation Between Ashtead Technology and Guild Esports
Can any of the company-specific risk be diversified away by investing in both Ashtead Technology and Guild Esports 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 Guild Esports 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 Guild Esports Plc, you can compare the effects of market volatilities on Ashtead Technology and Guild Esports 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 Guild Esports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashtead Technology and Guild Esports.
Diversification Opportunities for Ashtead Technology and Guild Esports
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ashtead and Guild is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Ashtead Technology Holdings and Guild Esports Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guild Esports Plc 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 Guild Esports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guild Esports Plc has no effect on the direction of Ashtead Technology i.e., Ashtead Technology and Guild Esports go up and down completely randomly.
Pair Corralation between Ashtead Technology and Guild Esports
Assuming the 90 days trading horizon Ashtead Technology Holdings is expected to generate 0.29 times more return on investment than Guild Esports. However, Ashtead Technology Holdings is 3.44 times less risky than Guild Esports. It trades about 0.16 of its potential returns per unit of risk. Guild Esports Plc is currently generating about 0.03 per unit of risk. If you would invest 53,000 in Ashtead Technology Holdings on September 5, 2024 and sell it today you would earn a total of 3,400 from holding Ashtead Technology Holdings or generate 6.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashtead Technology Holdings vs. Guild Esports Plc
Performance |
| Timeline |
| Ashtead Technology |
| Guild Esports Plc |
Ashtead Technology and Guild Esports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashtead Technology and Guild Esports
The main advantage of trading using opposite Ashtead Technology and Guild Esports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashtead Technology position performs unexpectedly, Guild Esports 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 Guild Esports will offset losses from the drop in Guild Esports' long position.| Ashtead Technology vs. Zoom Video Communications | Ashtead Technology vs. Enbridge | Ashtead Technology vs. Endo International PLC | Ashtead Technology vs. Polar Capital Technology |
| Guild Esports vs. Ashtead Technology Holdings | Guild Esports vs. GoldMining | Guild Esports vs. Cornish Metals | Guild Esports vs. Ecclesiastical Insurance Office |
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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