Correlation Between CT Global and Ashtead Technology
Can any of the company-specific risk be diversified away by investing in both CT Global and Ashtead Technology 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 CT Global and Ashtead Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CT Global Managed and Ashtead Technology Holdings, you can compare the effects of market volatilities on CT Global and Ashtead Technology 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 CT Global with a short position of Ashtead Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of CT Global and Ashtead Technology.
Diversification Opportunities for CT Global and Ashtead Technology
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between CMPG and Ashtead is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding CT Global Managed and Ashtead Technology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashtead Technology and CT Global 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 CT Global Managed are associated (or correlated) with Ashtead Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashtead Technology has no effect on the direction of CT Global i.e., CT Global and Ashtead Technology go up and down completely randomly.
Pair Corralation between CT Global and Ashtead Technology
Assuming the 90 days trading horizon CT Global is expected to generate 2.42 times less return on investment than Ashtead Technology. But when comparing it to its historical volatility, CT Global Managed is 5.53 times less risky than Ashtead Technology. It trades about 0.35 of its potential returns per unit of risk. Ashtead Technology Holdings is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 50,200 in Ashtead Technology Holdings on September 13, 2024 and sell it today you would earn a total of 3,100 from holding Ashtead Technology Holdings or generate 6.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
CT Global Managed vs. Ashtead Technology Holdings
Performance |
| Timeline |
| CT Global Managed |
| Ashtead Technology |
CT Global and Ashtead Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CT Global and Ashtead Technology
The main advantage of trading using opposite CT Global and Ashtead Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CT Global position performs unexpectedly, Ashtead Technology 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 Technology will offset losses from the drop in Ashtead Technology's long position.| CT Global vs. Catalyst Media Group | CT Global vs. CATLIN GROUP | CT Global vs. Tamburi Investment Partners | CT Global vs. Magnora ASA |
| Ashtead Technology vs. Zoom Video Communications | Ashtead Technology vs. Enbridge | Ashtead Technology vs. Endo International PLC | Ashtead Technology vs. Blue Star Capital |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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