Correlation Between Asbury Automotive and Assurant
Can any of the company-specific risk be diversified away by investing in both Asbury Automotive and Assurant 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 Assurant 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 Assurant, you can compare the effects of market volatilities on Asbury Automotive and Assurant 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 Assurant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asbury Automotive and Assurant.
Diversification Opportunities for Asbury Automotive and Assurant
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Asbury and Assurant is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Asbury Automotive Group and Assurant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assurant 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 Assurant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assurant has no effect on the direction of Asbury Automotive i.e., Asbury Automotive and Assurant go up and down completely randomly.
Pair Corralation between Asbury Automotive and Assurant
Considering the 90-day investment horizon Asbury Automotive is expected to generate 3.99 times less return on investment than Assurant. In addition to that, Asbury Automotive is 1.64 times more volatile than Assurant. It trades about 0.02 of its total potential returns per unit of risk. Assurant is currently generating about 0.12 per unit of volatility. If you would invest 12,627 in Assurant on September 12, 2024 and sell it today you would earn a total of 9,004 from holding Assurant or generate 71.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asbury Automotive Group vs. Assurant
Performance |
| Timeline |
| Asbury Automotive |
| Assurant |
Asbury Automotive and Assurant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asbury Automotive and Assurant
The main advantage of trading using opposite Asbury Automotive and Assurant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asbury Automotive position performs unexpectedly, Assurant 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 Assurant will offset losses from the drop in Assurant's long position.| Asbury Automotive vs. Sonic Automotive | Asbury Automotive vs. Lithia Motors | Asbury Automotive vs. AutoNation | Asbury Automotive vs. Penske Automotive Group |
| Assurant vs. Assured Guaranty | Assurant vs. Ambac Financial Group | Assurant vs. AMERISAFE | Assurant vs. Enact Holdings |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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