Correlation Between Ashtead Group and Nidec
Can any of the company-specific risk be diversified away by investing in both Ashtead Group and Nidec 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 Nidec 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 Nidec, you can compare the effects of market volatilities on Ashtead Group and Nidec 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 Nidec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashtead Group and Nidec.
Diversification Opportunities for Ashtead Group and Nidec
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ashtead and Nidec is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Ashtead Group plc and Nidec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nidec 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 Nidec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nidec has no effect on the direction of Ashtead Group i.e., Ashtead Group and Nidec go up and down completely randomly.
Pair Corralation between Ashtead Group and Nidec
Assuming the 90 days horizon Ashtead Group plc is expected to generate 1.05 times more return on investment than Nidec. However, Ashtead Group is 1.05 times more volatile than Nidec. It trades about 0.19 of its potential returns per unit of risk. Nidec is currently generating about 0.09 per unit of risk. If you would invest 5,738 in Ashtead Group plc on June 1, 2025 and sell it today you would earn a total of 1,664 from holding Ashtead Group plc or generate 29.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashtead Group plc vs. Nidec
Performance |
| Timeline |
| Ashtead Group plc |
| Nidec |
Ashtead Group and Nidec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashtead Group and Nidec
The main advantage of trading using opposite Ashtead Group and Nidec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashtead Group position performs unexpectedly, Nidec 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 Nidec will offset losses from the drop in Nidec's long position.| Ashtead Group vs. Ashtead Gro | Ashtead Group vs. African Discovery Group | Ashtead Group vs. BOC Aviation Limited | Ashtead Group vs. Black Diamond Group |
| Nidec vs. Daifuku Co | Nidec vs. Eaton PLC | Nidec vs. Yokogawa Electric Corp | Nidec vs. Brewbilt Manufacturing |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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