Correlation Between Weiss Korea and Ashtead Group
Can any of the company-specific risk be diversified away by investing in both Weiss Korea 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 Weiss Korea and Ashtead Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weiss Korea Opportunity and Ashtead Group PLC, you can compare the effects of market volatilities on Weiss Korea 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 Weiss Korea with a short position of Ashtead Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weiss Korea and Ashtead Group.
Diversification Opportunities for Weiss Korea and Ashtead Group
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Weiss and Ashtead is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Weiss Korea Opportunity 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 Weiss Korea 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 Weiss Korea Opportunity 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 Weiss Korea i.e., Weiss Korea and Ashtead Group go up and down completely randomly.
Pair Corralation between Weiss Korea and Ashtead Group
Assuming the 90 days trading horizon Weiss Korea Opportunity is expected to generate 2.76 times more return on investment than Ashtead Group. However, Weiss Korea is 2.76 times more volatile than Ashtead Group PLC. It trades about 0.23 of its potential returns per unit of risk. Ashtead Group PLC is currently generating about -0.32 per unit of risk. If you would invest 13,600 in Weiss Korea Opportunity on November 28, 2024 and sell it today you would earn a total of 3,009 from holding Weiss Korea Opportunity or generate 22.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weiss Korea Opportunity vs. Ashtead Group PLC
Performance |
| Timeline |
| Weiss Korea Opportunity |
| Ashtead Group PLC |
Weiss Korea and Ashtead Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weiss Korea and Ashtead Group
The main advantage of trading using opposite Weiss Korea and Ashtead Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weiss Korea 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.| Weiss Korea vs. Zoom Video Communications | Weiss Korea vs. Resolute Mining Limited | Weiss Korea vs. Atalaya Mining | Weiss Korea vs. Telecom Italia SpA |
| Ashtead Group vs. CleanTech Lithium plc | Ashtead Group vs. Martin Marietta Materials | Ashtead Group vs. Sartorius Stedim Biotech | Ashtead Group vs. Jade Road Investments |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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