Correlation Between Asbury Automotive and Caldas Gold
Can any of the company-specific risk be diversified away by investing in both Asbury Automotive and Caldas Gold 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 Caldas Gold 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 Caldas Gold, you can compare the effects of market volatilities on Asbury Automotive and Caldas Gold 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 Caldas Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asbury Automotive and Caldas Gold.
Diversification Opportunities for Asbury Automotive and Caldas Gold
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Asbury and Caldas is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Asbury Automotive Group and Caldas Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caldas Gold 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 Caldas Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caldas Gold has no effect on the direction of Asbury Automotive i.e., Asbury Automotive and Caldas Gold go up and down completely randomly.
Pair Corralation between Asbury Automotive and Caldas Gold
If you would invest 18.00 in Caldas Gold on September 14, 2024 and sell it today you would earn a total of 0.00 from holding Caldas Gold or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Asbury Automotive Group vs. Caldas Gold
Performance |
| Timeline |
| Asbury Automotive |
| Caldas Gold |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Asbury Automotive and Caldas Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asbury Automotive and Caldas Gold
The main advantage of trading using opposite Asbury Automotive and Caldas Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asbury Automotive position performs unexpectedly, Caldas Gold 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 Caldas Gold will offset losses from the drop in Caldas Gold's long position.| Asbury Automotive vs. Sonic Automotive | Asbury Automotive vs. Lithia Motors | Asbury Automotive vs. AutoNation | Asbury Automotive vs. Penske Automotive Group |
| Caldas Gold vs. SunLink Health Systems | Caldas Gold vs. Asbury Automotive Group | Caldas Gold vs. Radcom | Caldas Gold vs. US Global Investors |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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