Correlation Between Ashtead Technology and Gruppo MutuiOnline

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

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

Diversification Opportunities for Ashtead Technology and Gruppo MutuiOnline

0.33

Correlation Coefficient

Ashtead Technology  Gruppo MutuiOnline

Weak diversification

The 3 months correlation between Ashtead and Gruppo is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Ashtead Technology Holdings and Gruppo MutuiOnline SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gruppo MutuiOnline SpA and Ashtead Technology 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 Technology Holdings are associated (or correlated) with Gruppo MutuiOnline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gruppo MutuiOnline SpA has no effect on the direction of Ashtead Technology i.e., Ashtead Technology and Gruppo MutuiOnline go up and down completely randomly.

Pair Corralation between Ashtead Technology and Gruppo MutuiOnline

Assuming the 90 days trading horizon Ashtead Technology Holdings is expected to under-perform the Gruppo MutuiOnline. But the stock apears to be less risky and, when comparing its historical volatility, Ashtead Technology Holdings is 1.3 times less risky than Gruppo MutuiOnline. The stock trades about -0.08 of its potential returns per unit of risk. The Gruppo MutuiOnline SpA is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  3,335  in Gruppo MutuiOnline SpA on September 15, 2024 and sell it today you would earn a total of  625.00  from holding Gruppo MutuiOnline SpA or generate 18.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	43.08%
Values	Daily Returns

Ashtead Technology Holdings  vs.  Gruppo MutuiOnline SpA

Ashtead Technology

Risk-Adjusted Performance

0 of 100

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 uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Gruppo MutuiOnline SpA

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gruppo MutuiOnline SpA are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Gruppo MutuiOnline unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ashtead Technology and Gruppo MutuiOnline

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

The idea behind Ashtead Technology Holdings and Gruppo MutuiOnline SpA 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.