Correlation Between Asbury Automotive and Aegon NV
Can any of the company-specific risk be diversified away by investing in both Asbury Automotive and Aegon NV 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 Asbury Automotive and Aegon NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asbury Automotive Group and Aegon NV ADR, you can compare the effects of market volatilities on Asbury Automotive and Aegon NV 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 Asbury Automotive with a short position of Aegon NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asbury Automotive and Aegon NV.
Diversification Opportunities for Asbury Automotive and Aegon NV
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Asbury and Aegon is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Asbury Automotive Group and Aegon NV ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aegon NV ADR and Asbury Automotive 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 Asbury Automotive Group are associated (or correlated) with Aegon NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aegon NV ADR has no effect on the direction of Asbury Automotive i.e., Asbury Automotive and Aegon NV go up and down completely randomly.
Pair Corralation between Asbury Automotive and Aegon NV
Considering the 90-day investment horizon Asbury Automotive Group is expected to generate 1.03 times more return on investment than Aegon NV. However, Asbury Automotive is 1.03 times more volatile than Aegon NV ADR. It trades about -0.09 of its potential returns per unit of risk. Aegon NV ADR is currently generating about -0.1 per unit of risk. If you would invest 26,575 in Asbury Automotive Group on September 12, 2024 and sell it today you would lose (901.00) from holding Asbury Automotive Group or give up 3.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Asbury Automotive Group vs. Aegon NV ADR
Performance |
| Timeline |
| Asbury Automotive |
| Aegon NV ADR |
Asbury Automotive and Aegon NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asbury Automotive and Aegon NV
The main advantage of trading using opposite Asbury Automotive and Aegon NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asbury Automotive position performs unexpectedly, Aegon NV 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 Aegon NV will offset losses from the drop in Aegon NV's long position.| Asbury Automotive vs. Sonic Automotive | Asbury Automotive vs. Lithia Motors | Asbury Automotive vs. AutoNation | Asbury Automotive vs. Penske Automotive Group |
| Aegon NV vs. Hartford Financial Services | Aegon NV vs. Goosehead Insurance | Aegon NV vs. International General Insurance | Aegon NV vs. Enstar Group Limited |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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