Correlation Between Ashtead Technology and Impax Environmental
Can any of the company-specific risk be diversified away by investing in both Ashtead Technology and Impax Environmental 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 Impax Environmental 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 Impax Environmental Markets, you can compare the effects of market volatilities on Ashtead Technology and Impax Environmental 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 Impax Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashtead Technology and Impax Environmental.
Diversification Opportunities for Ashtead Technology and Impax Environmental
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ashtead and Impax is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Ashtead Technology Holdings and Impax Environmental Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impax Environmental 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 Impax Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impax Environmental has no effect on the direction of Ashtead Technology i.e., Ashtead Technology and Impax Environmental go up and down completely randomly.
Pair Corralation between Ashtead Technology and Impax Environmental
Assuming the 90 days trading horizon Ashtead Technology Holdings is expected to generate 2.52 times more return on investment than Impax Environmental. However, Ashtead Technology is 2.52 times more volatile than Impax Environmental Markets. It trades about 0.06 of its potential returns per unit of risk. Impax Environmental Markets is currently generating about -0.01 per unit of risk. If you would invest 30,676 in Ashtead Technology Holdings on September 4, 2024 and sell it today you would earn a total of 24,724 from holding Ashtead Technology Holdings or generate 80.6% 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. Impax Environmental Markets
Performance |
| Timeline |
| Ashtead Technology |
| Impax Environmental |
Ashtead Technology and Impax Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashtead Technology and Impax Environmental
The main advantage of trading using opposite Ashtead Technology and Impax Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashtead Technology position performs unexpectedly, Impax Environmental 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 Impax Environmental will offset losses from the drop in Impax Environmental's long position.| Ashtead Technology vs. Zoom Video Communications | Ashtead Technology vs. Enbridge | Ashtead Technology vs. Endo International PLC | Ashtead Technology vs. Polar Capital Technology |
| Impax Environmental vs. SupplyMe Capital PLC | Impax Environmental vs. Lloyds Banking Group | Impax Environmental vs. Premier African Minerals | Impax Environmental vs. SANTANDER UK 8 |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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