Correlation Between GreenX Metals and Ashtead Technology
Can any of the company-specific risk be diversified away by investing in both GreenX 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 GreenX 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 GreenX Metals and Ashtead Technology Holdings, you can compare the effects of market volatilities on GreenX 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 GreenX Metals with a short position of Ashtead Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenX Metals and Ashtead Technology.
Diversification Opportunities for GreenX Metals and Ashtead Technology
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GreenX and Ashtead is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding GreenX 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 GreenX 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 GreenX 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 GreenX Metals i.e., GreenX Metals and Ashtead Technology go up and down completely randomly.
Pair Corralation between GreenX Metals and Ashtead Technology
Assuming the 90 days trading horizon GreenX Metals is expected to under-perform the Ashtead Technology. In addition to that, GreenX Metals is 1.13 times more volatile than Ashtead Technology Holdings. It trades about -0.01 of its total potential returns per unit of risk. Ashtead Technology Holdings is currently generating about 0.06 per unit of volatility. If you would invest 31,324 in Ashtead Technology Holdings on August 31, 2024 and sell it today you would earn a total of 23,776 from holding Ashtead Technology Holdings or generate 75.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.59% |
| Values | Daily Returns |
GreenX Metals vs. Ashtead Technology Holdings
Performance |
| Timeline |
| GreenX Metals |
| Ashtead Technology |
GreenX Metals and Ashtead Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenX Metals and Ashtead Technology
The main advantage of trading using opposite GreenX Metals and Ashtead Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenX 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.The idea behind GreenX Metals and Ashtead Technology Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Ashtead Technology vs. Zoom Video Communications | Ashtead Technology vs. Enbridge | Ashtead Technology vs. Coor Service Management | Ashtead Technology vs. Surgical Science Sweden |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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