Correlation Between Ashtead Technology and Light Science
Can any of the company-specific risk be diversified away by investing in both Ashtead Technology and Light Science 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 Light Science 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 Light Science Technologies, you can compare the effects of market volatilities on Ashtead Technology and Light Science 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 Light Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashtead Technology and Light Science.
Diversification Opportunities for Ashtead Technology and Light Science
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ashtead and Light is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Ashtead Technology Holdings and Light Science Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Light Science Techno 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 Light Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Light Science Techno has no effect on the direction of Ashtead Technology i.e., Ashtead Technology and Light Science go up and down completely randomly.
Pair Corralation between Ashtead Technology and Light Science
Assuming the 90 days trading horizon Ashtead Technology Holdings is expected to generate 1.62 times more return on investment than Light Science. However, Ashtead Technology is 1.62 times more volatile than Light Science Technologies. It trades about 0.0 of its potential returns per unit of risk. Light Science Technologies is currently generating about -0.23 per unit of risk. If you would invest 57,200 in Ashtead Technology Holdings on November 2, 2024 and sell it today you would lose (800.00) from holding Ashtead Technology Holdings or give up 1.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashtead Technology Holdings vs. Light Science Technologies
Performance |
| Timeline |
| Ashtead Technology |
| Light Science Techno |
Ashtead Technology and Light Science Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashtead Technology and Light Science
The main advantage of trading using opposite Ashtead Technology and Light Science positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashtead Technology position performs unexpectedly, Light Science 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 Light Science will offset losses from the drop in Light Science's long position.| Ashtead Technology vs. Batm Advanced Communications | Ashtead Technology vs. Pets at Home | Ashtead Technology vs. Mobile Tornado Group | Ashtead Technology vs. DFS Furniture PLC |
| Light Science vs. Teradata Corp | Light Science vs. Eastinco Mining Exploration | Light Science vs. McEwen Mining | Light Science vs. GoldMining |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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