Correlation Between Asbury Automotive and Coeur DAlene
Can any of the company-specific risk be diversified away by investing in both Asbury Automotive and Coeur DAlene 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 Coeur DAlene 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 Coeur dAlene Bancorp, you can compare the effects of market volatilities on Asbury Automotive and Coeur DAlene 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 Coeur DAlene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asbury Automotive and Coeur DAlene.
Diversification Opportunities for Asbury Automotive and Coeur DAlene
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Asbury and Coeur is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Asbury Automotive Group and Coeur dAlene Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coeur dAlene Bancorp 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 Coeur DAlene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coeur dAlene Bancorp has no effect on the direction of Asbury Automotive i.e., Asbury Automotive and Coeur DAlene go up and down completely randomly.
Pair Corralation between Asbury Automotive and Coeur DAlene
Considering the 90-day investment horizon Asbury Automotive Group is expected to generate 0.52 times more return on investment than Coeur DAlene. However, Asbury Automotive Group is 1.91 times less risky than Coeur DAlene. It trades about 0.38 of its potential returns per unit of risk. Coeur dAlene Bancorp is currently generating about 0.11 per unit of risk. If you would invest 23,642 in Asbury Automotive Group on November 3, 2024 and sell it today you would earn a total of 6,026 from holding Asbury Automotive Group or generate 25.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Asbury Automotive Group vs. Coeur dAlene Bancorp
Performance |
| Timeline |
| Asbury Automotive |
| Coeur dAlene Bancorp |
Asbury Automotive and Coeur DAlene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asbury Automotive and Coeur DAlene
The main advantage of trading using opposite Asbury Automotive and Coeur DAlene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asbury Automotive position performs unexpectedly, Coeur DAlene 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 Coeur DAlene will offset losses from the drop in Coeur DAlene's long position.| Asbury Automotive vs. Sonic Automotive | Asbury Automotive vs. Lithia Motors | Asbury Automotive vs. AutoNation | Asbury Automotive vs. Penske Automotive Group |
| Coeur DAlene vs. Fair Isaac | Coeur DAlene vs. EvoAir Holdings | Coeur DAlene vs. Alaska Air Group | Coeur DAlene vs. Eldorado Gold Corp |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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