Correlation Between Oil Dri and Ashland Global

Can any of the company-specific risk be diversified away by investing in both Oil Dri and Ashland Global 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 Oil Dri and Ashland Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Oil Dri and Ashland Global Holdings, you can compare the effects of market volatilities on Oil Dri and Ashland Global 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 Oil Dri with a short position of Ashland Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oil Dri and Ashland Global.

Diversification Opportunities for Oil Dri and Ashland Global

-0.57

Correlation Coefficient

Oil Dri  Ashland Global

Excellent diversification

The 3 months correlation between Oil and Ashland is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Oil Dri and Ashland Global Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashland Global Holdings and Oil Dri 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 Oil Dri are associated (or correlated) with Ashland Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashland Global Holdings has no effect on the direction of Oil Dri i.e., Oil Dri and Ashland Global go up and down completely randomly.

Pair Corralation between Oil Dri and Ashland Global

Considering the 90-day investment horizon Oil Dri is expected to generate 0.97 times more return on investment than Ashland Global. However, Oil Dri is 1.03 times less risky than Ashland Global. It trades about 0.06 of its potential returns per unit of risk. Ashland Global Holdings is currently generating about -0.17 per unit of risk. If you would invest  4,539  in Oil Dri on December 17, 2024 and sell it today you would earn a total of  288.00  from holding Oil Dri or generate 6.35% return on investment over 90 days.

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

Oil Dri  vs.  Ashland Global Holdings

Oil Dri

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Oil Dri are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting fundamental indicators, Oil Dri may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Ashland Global Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ashland Global Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Oil Dri and Ashland Global

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

The idea behind Oil Dri and Ashland Global 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.