Correlation Between Las Vegas and Ashtead Group

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

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

Diversification Opportunities for Las Vegas and Ashtead Group

0.08

Correlation Coefficient

Las Vegas  Ashtead Group

Significant diversification

The 3 months correlation between Las and Ashtead is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Las Vegas Sands 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 Las Vegas 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 Las Vegas Sands 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 Las Vegas i.e., Las Vegas and Ashtead Group go up and down completely randomly.

Pair Corralation between Las Vegas and Ashtead Group

Considering the 90-day investment horizon Las Vegas Sands is expected to under-perform the Ashtead Group. But the stock apears to be less risky and, when comparing its historical volatility, Las Vegas Sands is 1.06 times less risky than Ashtead Group. The stock trades about -0.16 of its potential returns per unit of risk. The Ashtead Group plc is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  6,155  in Ashtead Group plc on December 27, 2024 and sell it today you would lose (463.00) from holding Ashtead Group plc or give up 7.52% of portfolio value over 90 days.

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

Las Vegas Sands  vs.  Ashtead Group plc

Las Vegas Sands

Risk-Adjusted Performance

Very Weak

Over the last 90 days Las Vegas Sands has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Ashtead Group plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ashtead Group plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Ashtead Group is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Las Vegas and Ashtead Group

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

The idea behind Las Vegas Sands and Ashtead Group plc 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.