Correlation Between Asbury Automotive and GoHealth
Can any of the company-specific risk be diversified away by investing in both Asbury Automotive and GoHealth 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 GoHealth 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 GoHealth, you can compare the effects of market volatilities on Asbury Automotive and GoHealth 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 GoHealth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asbury Automotive and GoHealth.
Diversification Opportunities for Asbury Automotive and GoHealth
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Asbury and GoHealth is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Asbury Automotive Group and GoHealth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoHealth 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 GoHealth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoHealth has no effect on the direction of Asbury Automotive i.e., Asbury Automotive and GoHealth go up and down completely randomly.
Pair Corralation between Asbury Automotive and GoHealth
Considering the 90-day investment horizon Asbury Automotive Group is expected to generate 0.52 times more return on investment than GoHealth. However, Asbury Automotive Group is 1.92 times less risky than GoHealth. It trades about 0.24 of its potential returns per unit of risk. GoHealth is currently generating about 0.06 per unit of risk. If you would invest 23,142 in Asbury Automotive Group on August 30, 2024 and sell it today you would earn a total of 2,861 from holding Asbury Automotive Group or generate 12.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asbury Automotive Group vs. GoHealth
Performance |
| Timeline |
| Asbury Automotive |
| GoHealth |
Asbury Automotive and GoHealth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asbury Automotive and GoHealth
The main advantage of trading using opposite Asbury Automotive and GoHealth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asbury Automotive position performs unexpectedly, GoHealth 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 GoHealth will offset losses from the drop in GoHealth's long position.| Asbury Automotive vs. Sonic Automotive | Asbury Automotive vs. Lithia Motors | Asbury Automotive vs. AutoNation | Asbury Automotive vs. Penske Automotive Group |
| GoHealth vs. eHealth | GoHealth vs. Tian Ruixiang Holdings | GoHealth vs. Huize Holding | GoHealth vs. Selectquote |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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