Correlation Between Ashtead Group and DFS Furniture

Can any of the company-specific risk be diversified away by investing in both Ashtead Group and DFS Furniture 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 DFS Furniture 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 DFS Furniture PLC, you can compare the effects of market volatilities on Ashtead Group and DFS Furniture 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 DFS Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashtead Group and DFS Furniture.

Diversification Opportunities for Ashtead Group and DFS Furniture

0.0

Correlation Coefficient

Ashtead Group  DFS Furniture

Pay attention - limited upside

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

Pair Corralation between Ashtead Group and DFS Furniture

If you would invest  13,150  in DFS Furniture PLC on April 24, 2025 and sell it today you would earn a total of  4,250  from holding DFS Furniture PLC or generate 32.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Ashtead Group PLC  vs.  DFS Furniture PLC

Ashtead Group PLC

Risk-Adjusted Performance

Good

Over the last 90 days Ashtead Group PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Ashtead Group is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

DFS Furniture PLC

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in DFS Furniture PLC are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, DFS Furniture exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ashtead Group and DFS Furniture

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

The idea behind Ashtead Group PLC and DFS Furniture 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.

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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.