Correlation Between Ashtead Technology and Abrdn Property

Can any of the company-specific risk be diversified away by investing in both Ashtead Technology and Abrdn Property 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 Abrdn Property 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 abrdn Property Income, you can compare the effects of market volatilities on Ashtead Technology and Abrdn Property 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 Abrdn Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashtead Technology and Abrdn Property.

Diversification Opportunities for Ashtead Technology and Abrdn Property

0.3

Correlation Coefficient

Ashtead Technology  Abrdn Property

Weak diversification

The 3 months correlation between Ashtead and Abrdn is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Ashtead Technology Holdings and abrdn Property Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on abrdn Property Income 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 Abrdn Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of abrdn Property Income has no effect on the direction of Ashtead Technology i.e., Ashtead Technology and Abrdn Property go up and down completely randomly.

Pair Corralation between Ashtead Technology and Abrdn Property

Assuming the 90 days trading horizon Ashtead Technology Holdings is expected to generate 1.05 times more return on investment than Abrdn Property. However, Ashtead Technology is 1.05 times more volatile than abrdn Property Income. It trades about 0.02 of its potential returns per unit of risk. abrdn Property Income is currently generating about -0.09 per unit of risk. If you would invest  53,600  in Ashtead Technology Holdings on December 22, 2024 and sell it today you would earn a total of  1,000.00  from holding Ashtead Technology Holdings or generate 1.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Ashtead Technology Holdings  vs.  abrdn Property Income

Ashtead Technology

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ashtead Technology Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

abrdn Property Income

Risk-Adjusted Performance

Very Weak

Over the last 90 days abrdn Property Income has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Ashtead Technology and Abrdn Property

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

The idea behind Ashtead Technology Holdings and abrdn Property Income 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..