Correlation Between Asbury Automotive and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Asbury Automotive and Harmony 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 Harmony 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 Harmony Gold Mining, you can compare the effects of market volatilities on Asbury Automotive and Harmony 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 Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asbury Automotive and Harmony Gold.
Diversification Opportunities for Asbury Automotive and Harmony Gold
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Asbury and Harmony is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Asbury Automotive Group and Harmony Gold Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harmony Gold Mining 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 Harmony Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harmony Gold Mining has no effect on the direction of Asbury Automotive i.e., Asbury Automotive and Harmony Gold go up and down completely randomly.
Pair Corralation between Asbury Automotive and Harmony Gold
Considering the 90-day investment horizon Asbury Automotive is expected to generate 1.08 times less return on investment than Harmony Gold. But when comparing it to its historical volatility, Asbury Automotive Group is 1.25 times less risky than Harmony Gold. It trades about 0.05 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 858.00 in Harmony Gold Mining on September 3, 2024 and sell it today you would earn a total of 92.00 from holding Harmony Gold Mining or generate 10.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.4% |
| Values | Daily Returns |
Asbury Automotive Group vs. Harmony Gold Mining
Performance |
| Timeline |
| Asbury Automotive |
| Harmony Gold Mining |
Asbury Automotive and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asbury Automotive and Harmony Gold
The main advantage of trading using opposite Asbury Automotive and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asbury Automotive position performs unexpectedly, Harmony 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 Harmony Gold will offset losses from the drop in Harmony Gold's long position.| Asbury Automotive vs. Sonic Automotive | Asbury Automotive vs. Lithia Motors | Asbury Automotive vs. AutoNation | Asbury Automotive vs. Penske Automotive Group |
| Harmony Gold vs. Harmony Gold Mining | Harmony Gold vs. SPACE | Harmony Gold vs. T Rowe Price | Harmony Gold vs. Ampleforth |
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 CEOs Directory module to screen CEOs from public companies around the world.
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