Correlation Between HOYA and Ashtead Group
Can any of the company-specific risk be diversified away by investing in both HOYA 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 HOYA and Ashtead Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HOYA Corporation and Ashtead Group plc, you can compare the effects of market volatilities on HOYA 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 HOYA with a short position of Ashtead Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of HOYA and Ashtead Group.
Diversification Opportunities for HOYA and Ashtead Group
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HOYA and Ashtead is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding HOYA Corp. 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 HOYA 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 HOYA Corporation 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 HOYA i.e., HOYA and Ashtead Group go up and down completely randomly.
Pair Corralation between HOYA and Ashtead Group
Assuming the 90 days horizon HOYA is expected to generate 3.86 times less return on investment than Ashtead Group. In addition to that, HOYA is 1.31 times more volatile than Ashtead Group plc. It trades about 0.03 of its total potential returns per unit of risk. Ashtead Group plc is currently generating about 0.15 per unit of volatility. If you would invest 7,000 in Ashtead Group plc on August 27, 2024 and sell it today you would earn a total of 400.00 from holding Ashtead Group plc or generate 5.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HOYA Corp. vs. Ashtead Group plc
Performance |
| Timeline |
| HOYA |
| Ashtead Group plc |
HOYA and Ashtead Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HOYA and Ashtead Group
The main advantage of trading using opposite HOYA and Ashtead Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HOYA 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.| HOYA vs. Grand Canyon Education | HOYA vs. PICKN PAY STORES | HOYA vs. SPARTAN STORES | HOYA vs. Adtalem Global Education |
| Ashtead Group vs. CN MODERN DAIRY | Ashtead Group vs. SENECA FOODS A | Ashtead Group vs. TreeHouse Foods | Ashtead Group vs. MIRAMAR HOTEL INV |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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