Correlation Between Ashtead Technology and Mulberry Group
Can any of the company-specific risk be diversified away by investing in both Ashtead Technology and Mulberry Group 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 Mulberry Group 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 Mulberry Group PLC, you can compare the effects of market volatilities on Ashtead Technology and Mulberry Group 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 Mulberry Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashtead Technology and Mulberry Group.
Diversification Opportunities for Ashtead Technology and Mulberry Group
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ashtead and Mulberry is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Ashtead Technology Holdings and Mulberry Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mulberry Group 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 Mulberry Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mulberry Group PLC has no effect on the direction of Ashtead Technology i.e., Ashtead Technology and Mulberry Group go up and down completely randomly.
Pair Corralation between Ashtead Technology and Mulberry Group
Assuming the 90 days trading horizon Ashtead Technology Holdings is expected to generate 0.75 times more return on investment than Mulberry Group. However, Ashtead Technology Holdings is 1.33 times less risky than Mulberry Group. It trades about 0.06 of its potential returns per unit of risk. Mulberry Group PLC is currently generating about -0.03 per unit of risk. If you would invest 31,274 in Ashtead Technology Holdings on September 3, 2024 and sell it today you would earn a total of 23,826 from holding Ashtead Technology Holdings or generate 76.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.6% |
| Values | Daily Returns |
Ashtead Technology Holdings vs. Mulberry Group PLC
Performance |
| Timeline |
| Ashtead Technology |
| Mulberry Group PLC |
Ashtead Technology and Mulberry Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashtead Technology and Mulberry Group
The main advantage of trading using opposite Ashtead Technology and Mulberry Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashtead Technology position performs unexpectedly, Mulberry Group 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 Mulberry Group will offset losses from the drop in Mulberry Group's long position.| Ashtead Technology vs. International Biotechnology Trust | Ashtead Technology vs. Smithson Investment Trust | Ashtead Technology vs. Air Products Chemicals | Ashtead Technology vs. Monks Investment Trust |
| Mulberry Group vs. Sabre Insurance Group | Mulberry Group vs. PureTech Health plc | Mulberry Group vs. Microchip Technology | Mulberry Group vs. Ashtead Technology Holdings |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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