Correlation Between Jacquet Metal and Ashtead Group
Can any of the company-specific risk be diversified away by investing in both Jacquet Metal 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 Jacquet Metal and Ashtead Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jacquet Metal Service and Ashtead Group plc, you can compare the effects of market volatilities on Jacquet Metal 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 Jacquet Metal with a short position of Ashtead Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacquet Metal and Ashtead Group.
Diversification Opportunities for Jacquet Metal and Ashtead Group
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jacquet and Ashtead is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Jacquet Metal Service 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 Jacquet Metal 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 Jacquet Metal Service 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 Jacquet Metal i.e., Jacquet Metal and Ashtead Group go up and down completely randomly.
Pair Corralation between Jacquet Metal and Ashtead Group
Assuming the 90 days horizon Jacquet Metal Service is expected to under-perform the Ashtead Group. But the stock apears to be less risky and, when comparing its historical volatility, Jacquet Metal Service is 1.27 times less risky than Ashtead Group. The stock trades about -0.01 of its potential returns per unit of risk. The Ashtead Group plc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 6,090 in Ashtead Group plc on September 12, 2024 and sell it today you would earn a total of 1,560 from holding Ashtead Group plc or generate 25.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jacquet Metal Service vs. Ashtead Group plc
Performance |
| Timeline |
| Jacquet Metal Service |
| Ashtead Group plc |
Jacquet Metal and Ashtead Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacquet Metal and Ashtead Group
The main advantage of trading using opposite Jacquet Metal and Ashtead Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacquet Metal 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.| Jacquet Metal vs. ArcelorMittal | Jacquet Metal vs. NIPPON STEEL SPADR | Jacquet Metal vs. Reliance Steel Aluminum | Jacquet Metal vs. Superior Plus Corp |
| Ashtead Group vs. LION ONE METALS | Ashtead Group vs. Jacquet Metal Service | Ashtead Group vs. NXP Semiconductors NV | Ashtead Group vs. Cleanaway Waste Management |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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