Correlation Between Ashtead Technology and Supermarket Income
Can any of the company-specific risk be diversified away by investing in both Ashtead Technology and Supermarket Income 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 Supermarket Income 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 Supermarket Income REIT, you can compare the effects of market volatilities on Ashtead Technology and Supermarket Income 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 Supermarket Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashtead Technology and Supermarket Income.
Diversification Opportunities for Ashtead Technology and Supermarket Income
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ashtead and Supermarket is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Ashtead Technology Holdings and Supermarket Income REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supermarket Income REIT 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 Supermarket Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supermarket Income REIT has no effect on the direction of Ashtead Technology i.e., Ashtead Technology and Supermarket Income go up and down completely randomly.
Pair Corralation between Ashtead Technology and Supermarket Income
Assuming the 90 days trading horizon Ashtead Technology Holdings is expected to generate 1.6 times more return on investment than Supermarket Income. However, Ashtead Technology is 1.6 times more volatile than Supermarket Income REIT. It trades about 0.05 of its potential returns per unit of risk. Supermarket Income REIT is currently generating about -0.02 per unit of risk. If you would invest 31,872 in Ashtead Technology Holdings on September 14, 2024 and sell it today you would earn a total of 20,628 from holding Ashtead Technology Holdings or generate 64.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Ashtead Technology Holdings vs. Supermarket Income REIT
Performance |
| Timeline |
| Ashtead Technology |
| Supermarket Income REIT |
Ashtead Technology and Supermarket Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashtead Technology and Supermarket Income
The main advantage of trading using opposite Ashtead Technology and Supermarket Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashtead Technology position performs unexpectedly, Supermarket Income 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 Supermarket Income will offset losses from the drop in Supermarket Income's long position.| Ashtead Technology vs. Smithson Investment Trust | Ashtead Technology vs. Intuitive Investments Group | Ashtead Technology vs. Herald Investment Trust | Ashtead Technology vs. Lloyds Banking Group |
| Supermarket Income vs. Microchip Technology | Supermarket Income vs. Take Two Interactive Software | Supermarket Income vs. Ashtead Technology Holdings | Supermarket Income vs. Sabien Technology Group |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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