Correlation Between H B and Ashland Global
Can any of the company-specific risk be diversified away by investing in both H B 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 H B and Ashland Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between H B Fuller and Ashland Global Holdings, you can compare the effects of market volatilities on H B 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 H B with a short position of Ashland Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of H B and Ashland Global.
Diversification Opportunities for H B and Ashland Global
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between FUL and Ashland is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding H B Fuller 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 H B 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 H B Fuller 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 H B i.e., H B and Ashland Global go up and down completely randomly.
Pair Corralation between H B and Ashland Global
Considering the 90-day investment horizon H B Fuller is expected to under-perform the Ashland Global. In addition to that, H B is 1.13 times more volatile than Ashland Global Holdings. It trades about -0.23 of its total potential returns per unit of risk. Ashland Global Holdings is currently generating about 0.04 per unit of volatility. If you would invest 9,526 in Ashland Global Holdings on January 26, 2024 and sell it today you would earn a total of 77.00 from holding Ashland Global Holdings or generate 0.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
H B Fuller vs. Ashland Global Holdings
Performance |
| Timeline |
| H B Fuller |
| Ashland Global Holdings |
H B and Ashland Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with H B and Ashland Global
The main advantage of trading using opposite H B and Ashland Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if H B 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 H B Fuller 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.| Ashland Global vs. H B Fuller | Ashland Global vs. Minerals Technologies | Ashland Global vs. Quaker Chemical | Ashland Global vs. Oil Dri |
Check out your portfolio center.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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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