Correlation Between Ashtead Technology and Spire Healthcare
Can any of the company-specific risk be diversified away by investing in both Ashtead Technology and Spire Healthcare 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 Spire Healthcare 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 Spire Healthcare Group, you can compare the effects of market volatilities on Ashtead Technology and Spire Healthcare 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 Spire Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashtead Technology and Spire Healthcare.
Diversification Opportunities for Ashtead Technology and Spire Healthcare
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ashtead and Spire is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Ashtead Technology Holdings and Spire Healthcare Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spire Healthcare 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 Spire Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spire Healthcare has no effect on the direction of Ashtead Technology i.e., Ashtead Technology and Spire Healthcare go up and down completely randomly.
Pair Corralation between Ashtead Technology and Spire Healthcare
Assuming the 90 days trading horizon Ashtead Technology Holdings is expected to under-perform the Spire Healthcare. In addition to that, Ashtead Technology is 1.69 times more volatile than Spire Healthcare Group. It trades about -0.03 of its total potential returns per unit of risk. Spire Healthcare Group is currently generating about 0.11 per unit of volatility. If you would invest 21,850 in Spire Healthcare Group on September 24, 2024 and sell it today you would earn a total of 500.00 from holding Spire Healthcare Group or generate 2.29% 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. Spire Healthcare Group
Performance |
| Timeline |
| Ashtead Technology |
| Spire Healthcare |
Ashtead Technology and Spire Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashtead Technology and Spire Healthcare
The main advantage of trading using opposite Ashtead Technology and Spire Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashtead Technology position performs unexpectedly, Spire Healthcare 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 Spire Healthcare will offset losses from the drop in Spire Healthcare's long position.| Ashtead Technology vs. Zoom Video Communications | Ashtead Technology vs. Enbridge | Ashtead Technology vs. Endo International PLC | Ashtead Technology vs. Rolls Royce Holdings PLC |
| Spire Healthcare vs. Tungsten West PLC | Spire Healthcare vs. Argo Group Limited | Spire Healthcare vs. Hardide PLC | Spire Healthcare vs. Gfinity PLC |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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