Correlation Between Ashtead Technology and Raymond James

Can any of the company-specific risk be diversified away by investing in both Ashtead Technology and Raymond James 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 Ashtead Technology and Raymond James into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ashtead Technology Holdings and Raymond James Financial, you can compare the effects of market volatilities on Ashtead Technology and Raymond James 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 Ashtead Technology with a short position of Raymond James. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashtead Technology and Raymond James.

Diversification Opportunities for Ashtead Technology and Raymond James

-0.24

Correlation Coefficient

Ashtead Technology  Raymond James

Very good diversification

The 3 months correlation between Ashtead and Raymond is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Ashtead Technology Holdings and Raymond James Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raymond James Financial and Ashtead 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 Ashtead Technology Holdings are associated (or correlated) with Raymond James. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raymond James Financial has no effect on the direction of Ashtead Technology i.e., Ashtead Technology and Raymond James go up and down completely randomly.

Pair Corralation between Ashtead Technology and Raymond James

Assuming the 90 days trading horizon Ashtead Technology Holdings is expected to under-perform the Raymond James. In addition to that, Ashtead Technology is 1.16 times more volatile than Raymond James Financial. It trades about 0.0 of its total potential returns per unit of risk. Raymond James Financial is currently generating about 0.14 per unit of volatility. If you would invest  14,520  in Raymond James Financial on October 25, 2024 and sell it today you would earn a total of  2,482  from holding Raymond James Financial or generate 17.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.16%
Values	Daily Returns

Ashtead Technology Holdings  vs.  Raymond James Financial

Ashtead Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ashtead Technology Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Ashtead Technology is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Raymond James Financial

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Raymond James Financial are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Raymond James unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ashtead Technology and Raymond James

The main advantage of trading using opposite Ashtead Technology and Raymond James positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashtead Technology position performs unexpectedly, Raymond James 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 Raymond James will offset losses from the drop in Raymond James' long position.

The idea behind Ashtead Technology Holdings and Raymond James Financial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.