Correlation Between Asbury Automotive and Granite Falls
Can any of the company-specific risk be diversified away by investing in both Asbury Automotive and Granite Falls 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 Granite Falls 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 Granite Falls Energy, you can compare the effects of market volatilities on Asbury Automotive and Granite Falls 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 Granite Falls. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asbury Automotive and Granite Falls.
Diversification Opportunities for Asbury Automotive and Granite Falls
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Asbury and Granite is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Asbury Automotive Group and Granite Falls Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granite Falls Energy 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 Granite Falls. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Granite Falls Energy has no effect on the direction of Asbury Automotive i.e., Asbury Automotive and Granite Falls go up and down completely randomly.
Pair Corralation between Asbury Automotive and Granite Falls
Considering the 90-day investment horizon Asbury Automotive Group is expected to generate 1.72 times more return on investment than Granite Falls. However, Asbury Automotive is 1.72 times more volatile than Granite Falls Energy. It trades about 0.05 of its potential returns per unit of risk. Granite Falls Energy is currently generating about -0.03 per unit of risk. If you would invest 17,036 in Asbury Automotive Group on September 5, 2024 and sell it today you would earn a total of 9,499 from holding Asbury Automotive Group or generate 55.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Asbury Automotive Group vs. Granite Falls Energy
Performance |
| Timeline |
| Asbury Automotive |
| Granite Falls Energy |
Asbury Automotive and Granite Falls Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asbury Automotive and Granite Falls
The main advantage of trading using opposite Asbury Automotive and Granite Falls positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asbury Automotive position performs unexpectedly, Granite Falls 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 Granite Falls will offset losses from the drop in Granite Falls' long position.| Asbury Automotive vs. Sonic Automotive | Asbury Automotive vs. Lithia Motors | Asbury Automotive vs. AutoNation | Asbury Automotive vs. Penske Automotive Group |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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