Correlation Between Batm Advanced and Ashtead Group
Can any of the company-specific risk be diversified away by investing in both Batm Advanced 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 Batm Advanced and Ashtead Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Batm Advanced Communications and Ashtead Group PLC, you can compare the effects of market volatilities on Batm Advanced 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 Batm Advanced with a short position of Ashtead Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Batm Advanced and Ashtead Group.
Diversification Opportunities for Batm Advanced and Ashtead Group
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Batm and Ashtead is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Batm Advanced Communications 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 Batm Advanced 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 Batm Advanced Communications 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 Batm Advanced i.e., Batm Advanced and Ashtead Group go up and down completely randomly.
Pair Corralation between Batm Advanced and Ashtead Group
Assuming the 90 days trading horizon Batm Advanced Communications is expected to under-perform the Ashtead Group. In addition to that, Batm Advanced is 1.43 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 0.32 per unit of volatility. If you would invest 494,182 in Ashtead Group PLC on October 22, 2024 and sell it today you would earn a total of 38,818 from holding Ashtead Group PLC or generate 7.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Batm Advanced Communications vs. Ashtead Group PLC
Performance |
| Timeline |
| Batm Advanced Commun |
| Ashtead Group PLC |
Batm Advanced and Ashtead Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Batm Advanced and Ashtead Group
The main advantage of trading using opposite Batm Advanced and Ashtead Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Batm Advanced 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.| Batm Advanced vs. Made Tech Group | Batm Advanced vs. Concurrent Technologies Plc | Batm Advanced vs. Home Depot | Batm Advanced vs. Synthomer plc |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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