Correlation Between Smithson Investment and Ashtead Technology
Can any of the company-specific risk be diversified away by investing in both Smithson Investment 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 Smithson Investment and Ashtead Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smithson Investment Trust and Ashtead Technology Holdings, you can compare the effects of market volatilities on Smithson Investment 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 Smithson Investment with a short position of Ashtead Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smithson Investment and Ashtead Technology.
Diversification Opportunities for Smithson Investment and Ashtead Technology
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Smithson and Ashtead is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Smithson Investment Trust and Ashtead Technology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashtead Technology and Smithson Investment 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 Smithson Investment Trust 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 Smithson Investment i.e., Smithson Investment and Ashtead Technology go up and down completely randomly.
Pair Corralation between Smithson Investment and Ashtead Technology
Assuming the 90 days trading horizon Smithson Investment Trust is expected to generate 0.19 times more return on investment than Ashtead Technology. However, Smithson Investment Trust is 5.15 times less risky than Ashtead Technology. It trades about 0.32 of its potential returns per unit of risk. Ashtead Technology Holdings is currently generating about -0.04 per unit of risk. If you would invest 147,800 in Smithson Investment Trust on November 5, 2024 and sell it today you would earn a total of 8,200 from holding Smithson Investment Trust or generate 5.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smithson Investment Trust vs. Ashtead Technology Holdings
Performance |
| Timeline |
| Smithson Investment Trust |
| Ashtead Technology |
Smithson Investment and Ashtead Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smithson Investment and Ashtead Technology
The main advantage of trading using opposite Smithson Investment and Ashtead Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smithson Investment 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.| Smithson Investment vs. Quadrise Plc | Smithson Investment vs. ImmuPharma PLC | Smithson Investment vs. Intuitive Investments Group | Smithson Investment vs. European Metals Holdings |
| Ashtead Technology vs. Beowulf Mining | Ashtead Technology vs. GoldMining | Ashtead Technology vs. McEwen Mining | Ashtead Technology vs. iShares Physical Silver |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |