Correlation Between Cornish Metals and Ashtead Technology
Can any of the company-specific risk be diversified away by investing in both Cornish Metals 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 Cornish Metals and Ashtead Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cornish Metals and Ashtead Technology Holdings, you can compare the effects of market volatilities on Cornish Metals 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 Cornish Metals with a short position of Ashtead Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cornish Metals and Ashtead Technology.
Diversification Opportunities for Cornish Metals and Ashtead Technology
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cornish and Ashtead is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Cornish Metals and Ashtead Technology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashtead Technology and Cornish Metals 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 Cornish Metals 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 Cornish Metals i.e., Cornish Metals and Ashtead Technology go up and down completely randomly.
Pair Corralation between Cornish Metals and Ashtead Technology
Assuming the 90 days trading horizon Cornish Metals is expected to generate 0.99 times more return on investment than Ashtead Technology. However, Cornish Metals is 1.01 times less risky than Ashtead Technology. It trades about 0.3 of its potential returns per unit of risk. Ashtead Technology Holdings is currently generating about -0.08 per unit of risk. If you would invest 815.00 in Cornish Metals on October 10, 2024 and sell it today you would earn a total of 123.00 from holding Cornish Metals or generate 15.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cornish Metals vs. Ashtead Technology Holdings
Performance |
| Timeline |
| Cornish Metals |
| Ashtead Technology |
Cornish Metals and Ashtead Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cornish Metals and Ashtead Technology
The main advantage of trading using opposite Cornish Metals and Ashtead Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cornish Metals 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.| Cornish Metals vs. Travel Leisure Co | Cornish Metals vs. Trellus Health plc | Cornish Metals vs. Target Healthcare REIT | Cornish Metals vs. Spire Healthcare Group |
| Ashtead Technology vs. Cornish Metals | Ashtead Technology vs. Sovereign Metals | Ashtead Technology vs. Axway Software SA | Ashtead Technology vs. Spirent Communications plc |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Stocks Directory Find actively traded stocks across global markets | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |