Correlation Between Intuitive Investments and Ashtead Technology

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

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

Diversification Opportunities for Intuitive Investments and Ashtead Technology

0.39

Correlation Coefficient

Intuitive Investments  Ashtead Technology

Weak diversification

The 3 months correlation between Intuitive and Ashtead is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Investments 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 Intuitive Investments 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 Intuitive Investments 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 Intuitive Investments i.e., Intuitive Investments and Ashtead Technology go up and down completely randomly.

Pair Corralation between Intuitive Investments and Ashtead Technology

Assuming the 90 days trading horizon Intuitive Investments Group is expected to generate 0.64 times more return on investment than Ashtead Technology. However, Intuitive Investments Group is 1.55 times less risky than Ashtead Technology. It trades about -0.22 of its potential returns per unit of risk. Ashtead Technology Holdings is currently generating about -0.25 per unit of risk. If you would invest  12,150  in Intuitive Investments Group on December 4, 2024 and sell it today you would lose (600.00) from holding Intuitive Investments Group or give up 4.94% of portfolio value over 90 days.

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

Intuitive Investments Group  vs.  Ashtead Technology Holdings

Intuitive Investments

Risk-Adjusted Performance

Very Weak

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

Ashtead Technology

Risk-Adjusted Performance

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 latest uncertain performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Intuitive Investments and Ashtead Technology

The main advantage of trading using opposite Intuitive Investments and Ashtead Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intuitive Investments 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.

The idea behind Intuitive Investments Group and Ashtead Technology Holdings 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.