Correlation Between Ashtead Technology and Worldwide Healthcare
Can any of the company-specific risk be diversified away by investing in both Ashtead Technology and Worldwide 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 Worldwide 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 Worldwide Healthcare Trust, you can compare the effects of market volatilities on Ashtead Technology and Worldwide 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 Worldwide Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashtead Technology and Worldwide Healthcare.
Diversification Opportunities for Ashtead Technology and Worldwide Healthcare
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ashtead and Worldwide is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Ashtead Technology Holdings and Worldwide Healthcare Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Worldwide 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 Worldwide Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Worldwide Healthcare has no effect on the direction of Ashtead Technology i.e., Ashtead Technology and Worldwide Healthcare go up and down completely randomly.
Pair Corralation between Ashtead Technology and Worldwide Healthcare
Assuming the 90 days trading horizon Ashtead Technology Holdings is expected to generate 2.13 times more return on investment than Worldwide Healthcare. However, Ashtead Technology is 2.13 times more volatile than Worldwide Healthcare Trust. It trades about -0.03 of its potential returns per unit of risk. Worldwide Healthcare Trust is currently generating about -0.23 per unit of risk. If you would invest 52,400 in Ashtead Technology Holdings on September 24, 2024 and sell it today you would lose (700.00) from holding Ashtead Technology Holdings or give up 1.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashtead Technology Holdings vs. Worldwide Healthcare Trust
Performance |
| Timeline |
| Ashtead Technology |
| Worldwide Healthcare |
Ashtead Technology and Worldwide Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashtead Technology and Worldwide Healthcare
The main advantage of trading using opposite Ashtead Technology and Worldwide Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashtead Technology position performs unexpectedly, Worldwide 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 Worldwide Healthcare will offset losses from the drop in Worldwide 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 |
| Worldwide Healthcare vs. Samsung Electronics Co | Worldwide Healthcare vs. Samsung Electronics Co | Worldwide Healthcare vs. Hyundai Motor | Worldwide Healthcare vs. Toyota Motor Corp |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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