Correlation Between MyHealthChecked Plc and Ashtead Group
Can any of the company-specific risk be diversified away by investing in both MyHealthChecked Plc 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 MyHealthChecked Plc and Ashtead Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MyHealthChecked Plc and Ashtead Group PLC, you can compare the effects of market volatilities on MyHealthChecked Plc 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 MyHealthChecked Plc with a short position of Ashtead Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of MyHealthChecked Plc and Ashtead Group.
Diversification Opportunities for MyHealthChecked Plc and Ashtead Group
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between MyHealthChecked and Ashtead is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding MyHealthChecked Plc 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 MyHealthChecked Plc 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 MyHealthChecked Plc 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 MyHealthChecked Plc i.e., MyHealthChecked Plc and Ashtead Group go up and down completely randomly.
Pair Corralation between MyHealthChecked Plc and Ashtead Group
Assuming the 90 days trading horizon MyHealthChecked Plc is expected to generate 4.65 times more return on investment than Ashtead Group. However, MyHealthChecked Plc is 4.65 times more volatile than Ashtead Group PLC. It trades about 0.47 of its potential returns per unit of risk. Ashtead Group PLC is currently generating about 0.38 per unit of risk. If you would invest 1,075 in MyHealthChecked Plc on October 24, 2024 and sell it today you would earn a total of 775.00 from holding MyHealthChecked Plc or generate 72.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MyHealthChecked Plc vs. Ashtead Group PLC
Performance |
| Timeline |
| MyHealthChecked Plc |
| Ashtead Group PLC |
MyHealthChecked Plc and Ashtead Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MyHealthChecked Plc and Ashtead Group
The main advantage of trading using opposite MyHealthChecked Plc and Ashtead Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MyHealthChecked Plc 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.| MyHealthChecked Plc vs. Samsung Electronics Co | MyHealthChecked Plc vs. Samsung Electronics Co | MyHealthChecked Plc vs. Toyota Motor Corp | MyHealthChecked Plc vs. Reliance Industries Ltd |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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