Correlation Between BOC Aviation and Ashtead Group
Can any of the company-specific risk be diversified away by investing in both BOC Aviation and Ashtead 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 BOC Aviation and Ashtead Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BOC Aviation Limited and Ashtead Group plc, you can compare the effects of market volatilities on BOC Aviation and Ashtead 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 BOC Aviation with a short position of Ashtead Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of BOC Aviation and Ashtead Group.
Diversification Opportunities for BOC Aviation and Ashtead Group
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BOC and Ashtead is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding BOC Aviation Limited and Ashtead Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashtead Group plc and BOC Aviation 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 BOC Aviation Limited are associated (or correlated) with Ashtead Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashtead Group plc has no effect on the direction of BOC Aviation i.e., BOC Aviation and Ashtead Group go up and down completely randomly.
Pair Corralation between BOC Aviation and Ashtead Group
Assuming the 90 days horizon BOC Aviation Limited is expected to under-perform the Ashtead Group. In addition to that, BOC Aviation is 1.07 times more volatile than Ashtead Group plc. It trades about -0.04 of its total potential returns per unit of risk. Ashtead Group plc is currently generating about 0.08 per unit of volatility. If you would invest 7,605 in Ashtead Group plc on August 24, 2024 and sell it today you would earn a total of 262.00 from holding Ashtead Group plc or generate 3.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 91.3% |
| Values | Daily Returns |
BOC Aviation Limited vs. Ashtead Group plc
Performance |
| Timeline |
| BOC Aviation Limited |
| Ashtead Group plc |
BOC Aviation and Ashtead Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BOC Aviation and Ashtead Group
The main advantage of trading using opposite BOC Aviation and Ashtead Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BOC Aviation position performs unexpectedly, Ashtead 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 Ashtead Group will offset losses from the drop in Ashtead Group's long position.| BOC Aviation vs. United Rentals | BOC Aviation vs. Ashtead Gro | BOC Aviation vs. Ashtead Group plc | BOC Aviation vs. AerCap Holdings NV |
| Ashtead Group vs. United Rentals | Ashtead Group vs. Ashtead Gro | Ashtead Group vs. AerCap Holdings NV | Ashtead Group vs. Fortress Transp Infra |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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