Correlation Between Xeros Technology and Ashtead Technology
Can any of the company-specific risk be diversified away by investing in both Xeros Technology 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 Xeros Technology and Ashtead Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xeros Technology Group and Ashtead Technology Holdings, you can compare the effects of market volatilities on Xeros Technology 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 Xeros Technology with a short position of Ashtead Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xeros Technology and Ashtead Technology.
Diversification Opportunities for Xeros Technology and Ashtead Technology
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Xeros and Ashtead is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Xeros Technology Group and Ashtead Technology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashtead Technology and Xeros Technology 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 Xeros Technology Group 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 Xeros Technology i.e., Xeros Technology and Ashtead Technology go up and down completely randomly.
Pair Corralation between Xeros Technology and Ashtead Technology
Assuming the 90 days trading horizon Xeros Technology is expected to generate 2.93 times less return on investment than Ashtead Technology. In addition to that, Xeros Technology is 1.44 times more volatile than Ashtead Technology Holdings. It trades about 0.01 of its total potential returns per unit of risk. Ashtead Technology Holdings is currently generating about 0.05 per unit of volatility. If you would invest 55,000 in Ashtead Technology Holdings on October 27, 2024 and sell it today you would earn a total of 4,300 from holding Ashtead Technology Holdings or generate 7.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xeros Technology Group vs. Ashtead Technology Holdings
Performance |
| Timeline |
| Xeros Technology |
| Ashtead Technology |
Xeros Technology and Ashtead Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xeros Technology and Ashtead Technology
The main advantage of trading using opposite Xeros Technology and Ashtead Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xeros Technology 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.| Xeros Technology vs. SupplyMe Capital PLC | Xeros Technology vs. Grand Vision Media | Xeros Technology vs. Overstock | Xeros Technology vs. DG Innovate PLC |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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