Correlation Between Chrysalis Investments and Ashtead Group
Can any of the company-specific risk be diversified away by investing in both Chrysalis Investments 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 Chrysalis Investments and Ashtead Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chrysalis Investments and Ashtead Group PLC, you can compare the effects of market volatilities on Chrysalis Investments 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 Chrysalis Investments with a short position of Ashtead Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chrysalis Investments and Ashtead Group.
Diversification Opportunities for Chrysalis Investments and Ashtead Group
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chrysalis and Ashtead is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Chrysalis Investments 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 Chrysalis Investments 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 Chrysalis Investments 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 Chrysalis Investments i.e., Chrysalis Investments and Ashtead Group go up and down completely randomly.
Pair Corralation between Chrysalis Investments and Ashtead Group
Assuming the 90 days trading horizon Chrysalis Investments is expected to generate 0.87 times more return on investment than Ashtead Group. However, Chrysalis Investments is 1.14 times less risky than Ashtead Group. It trades about 0.36 of its potential returns per unit of risk. Ashtead Group PLC is currently generating about 0.23 per unit of risk. If you would invest 8,670 in Chrysalis Investments on September 2, 2024 and sell it today you would earn a total of 960.00 from holding Chrysalis Investments or generate 11.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chrysalis Investments vs. Ashtead Group PLC
Performance |
| Timeline |
| Chrysalis Investments |
| Ashtead Group PLC |
Chrysalis Investments and Ashtead Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chrysalis Investments and Ashtead Group
The main advantage of trading using opposite Chrysalis Investments and Ashtead Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chrysalis Investments 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.| Chrysalis Investments vs. Trainline Plc | Chrysalis Investments vs. Check Point Software | Chrysalis Investments vs. Infrastrutture Wireless Italiane | Chrysalis Investments vs. Auction Technology Group |
| Ashtead Group vs. Samsung Electronics Co | Ashtead Group vs. Samsung Electronics Co | Ashtead Group vs. Hyundai Motor | Ashtead Group 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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