Correlation Between Bird Global and Ashtead Group

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

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

Diversification Opportunities for Bird Global and Ashtead Group

-0.64

Correlation Coefficient

Bird Global  Ashtead Group

Excellent diversification

The 3 months correlation between Bird and Ashtead is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Bird Global 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 Bird Global 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 Bird Global 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 Bird Global i.e., Bird Global and Ashtead Group go up and down completely randomly.

Pair Corralation between Bird Global and Ashtead Group

If you would invest  6,825  in Ashtead Group plc on September 12, 2024 and sell it today you would lose (10.00) from holding Ashtead Group plc or give up 0.15% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.59%
Values	Daily Returns

Bird Global  vs.  Ashtead Group plc

Bird Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bird Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Bird Global is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Ashtead Group plc

Risk-Adjusted Performance

1 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ashtead Group plc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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 Bird Global and Ashtead Group

The main advantage of trading using opposite Bird Global and Ashtead Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bird Global 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 Bird Global 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.