Correlation Between Asbury Automotive and GAIL (India)
Can any of the company-specific risk be diversified away by investing in both Asbury Automotive and GAIL (India) 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 GAIL (India) 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 GAIL Limited, you can compare the effects of market volatilities on Asbury Automotive and GAIL (India) 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 GAIL (India). Check out your portfolio center. Please also check ongoing floating volatility patterns of Asbury Automotive and GAIL (India).
Diversification Opportunities for Asbury Automotive and GAIL (India)
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Asbury and GAIL is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Asbury Automotive Group and GAIL Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAIL Limited 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 GAIL (India). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAIL Limited has no effect on the direction of Asbury Automotive i.e., Asbury Automotive and GAIL (India) go up and down completely randomly.
Pair Corralation between Asbury Automotive and GAIL (India)
Considering the 90-day investment horizon Asbury Automotive Group is expected to generate 0.77 times more return on investment than GAIL (India). However, Asbury Automotive Group is 1.29 times less risky than GAIL (India). It trades about 0.0 of its potential returns per unit of risk. GAIL Limited is currently generating about -0.11 per unit of risk. If you would invest 22,321 in Asbury Automotive Group on January 7, 2025 and sell it today you would lose (758.00) from holding Asbury Automotive Group or give up 3.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 47.26% |
| Values | Daily Returns |
Asbury Automotive Group vs. GAIL Limited
Performance |
| Timeline |
| Asbury Automotive |
| GAIL Limited |
Asbury Automotive and GAIL (India) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asbury Automotive and GAIL (India)
The main advantage of trading using opposite Asbury Automotive and GAIL (India) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asbury Automotive position performs unexpectedly, GAIL (India) 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 GAIL (India) will offset losses from the drop in GAIL (India)'s long position.| Asbury Automotive vs. Sonic Automotive | Asbury Automotive vs. Lithia Motors | Asbury Automotive vs. AutoNation | Asbury Automotive vs. Penske Automotive Group |
| GAIL (India) vs. Qualys Inc | GAIL (India) vs. WEC Energy Group | GAIL (India) vs. VirnetX Holding Corp | GAIL (India) vs. CenterPoint Energy |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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