Correlation Between SupplyMe Capital and Ashtead Group
Can any of the company-specific risk be diversified away by investing in both SupplyMe Capital 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 SupplyMe Capital and Ashtead Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SupplyMe Capital PLC and Ashtead Group PLC, you can compare the effects of market volatilities on SupplyMe Capital 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 SupplyMe Capital with a short position of Ashtead Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of SupplyMe Capital and Ashtead Group.
Diversification Opportunities for SupplyMe Capital and Ashtead Group
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SupplyMe and Ashtead is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding SupplyMe Capital 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 SupplyMe Capital 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 SupplyMe Capital 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 SupplyMe Capital i.e., SupplyMe Capital and Ashtead Group go up and down completely randomly.
Pair Corralation between SupplyMe Capital and Ashtead Group
Assuming the 90 days trading horizon SupplyMe Capital PLC is expected to under-perform the Ashtead Group. In addition to that, SupplyMe Capital is 4.18 times more volatile than Ashtead Group PLC. It trades about -0.23 of its total potential returns per unit of risk. Ashtead Group PLC is currently generating about 0.4 per unit of volatility. If you would invest 491,204 in Ashtead Group PLC on October 25, 2024 and sell it today you would earn a total of 55,396 from holding Ashtead Group PLC or generate 11.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
SupplyMe Capital PLC vs. Ashtead Group PLC
Performance |
| Timeline |
| SupplyMe Capital PLC |
| Ashtead Group PLC |
SupplyMe Capital and Ashtead Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SupplyMe Capital and Ashtead Group
The main advantage of trading using opposite SupplyMe Capital and Ashtead Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SupplyMe Capital 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.| SupplyMe Capital vs. Ecofin Global Utilities | SupplyMe Capital vs. URU Metals | SupplyMe Capital vs. European Metals Holdings | SupplyMe Capital vs. Rheinmetall AG |
| Ashtead Group vs. Atalaya Mining | Ashtead Group vs. Coeur Mining | Ashtead Group vs. Blackrock World Mining | Ashtead Group vs. Eastinco Mining Exploration |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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