Correlation Between Ashtead Group and China Aircraft

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Can any of the company-specific risk be diversified away by investing in both Ashtead Group and China Aircraft 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 Group and China Aircraft into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ashtead Group Plc and China Aircraft Leasing, you can compare the effects of market volatilities on Ashtead Group and China Aircraft 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 Group with a short position of China Aircraft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashtead Group and China Aircraft.

Diversification Opportunities for Ashtead Group and China Aircraft

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Ashtead and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ashtead Group Plc and China Aircraft Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Aircraft Leasing and Ashtead Group 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 Group Plc are associated (or correlated) with China Aircraft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Aircraft Leasing has no effect on the direction of Ashtead Group i.e., Ashtead Group and China Aircraft go up and down completely randomly.

Pair Corralation between Ashtead Group and China Aircraft

If you would invest  6,835  in Ashtead Group Plc on December 3, 2023 and sell it today you would earn a total of  411.00  from holding Ashtead Group Plc or generate 6.01% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Ashtead Group Plc  vs.  China Aircraft Leasing

 Performance 
       Timeline  
Ashtead Group Plc 

Risk-Adjusted Performance

8 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Ashtead Group Plc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent basic indicators, Ashtead Group reported solid returns over the last few months and may actually be approaching a breakup point.
China Aircraft Leasing 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days China Aircraft Leasing has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, China Aircraft is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Ashtead Group and China Aircraft Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ashtead Group and China Aircraft

The main advantage of trading using opposite Ashtead Group and China Aircraft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashtead Group position performs unexpectedly, China Aircraft 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 China Aircraft will offset losses from the drop in China Aircraft's long position.
The idea behind Ashtead Group Plc and China Aircraft Leasing 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.

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