Correlation Between Asbury Automotive and Aerofoam Metals
Can any of the company-specific risk be diversified away by investing in both Asbury Automotive and Aerofoam Metals 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 Aerofoam Metals 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 Aerofoam Metals, you can compare the effects of market volatilities on Asbury Automotive and Aerofoam Metals 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 Aerofoam Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asbury Automotive and Aerofoam Metals.
Diversification Opportunities for Asbury Automotive and Aerofoam Metals
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Asbury and Aerofoam is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Asbury Automotive Group and Aerofoam Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aerofoam Metals 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 Aerofoam Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aerofoam Metals has no effect on the direction of Asbury Automotive i.e., Asbury Automotive and Aerofoam Metals go up and down completely randomly.
Pair Corralation between Asbury Automotive and Aerofoam Metals
If you would invest 22,558 in Asbury Automotive Group on August 28, 2024 and sell it today you would earn a total of 4,124 from holding Asbury Automotive Group or generate 18.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Asbury Automotive Group vs. Aerofoam Metals
Performance |
| Timeline |
| Asbury Automotive |
| Aerofoam Metals |
Asbury Automotive and Aerofoam Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asbury Automotive and Aerofoam Metals
The main advantage of trading using opposite Asbury Automotive and Aerofoam Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asbury Automotive position performs unexpectedly, Aerofoam Metals 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 Aerofoam Metals will offset losses from the drop in Aerofoam Metals' long position.| Asbury Automotive vs. Sonic Automotive | Asbury Automotive vs. Lithia Motors | Asbury Automotive vs. AutoNation | Asbury Automotive vs. Penske Automotive Group |
| Aerofoam Metals vs. FitLife Brands, Common | Aerofoam Metals vs. HUMANA INC | Aerofoam Metals vs. SCOR PK | Aerofoam Metals vs. Aquagold International |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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