Correlation Between Asbury Automotive and Highway Holdings
Can any of the company-specific risk be diversified away by investing in both Asbury Automotive and Highway Holdings 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 Highway Holdings 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 Highway Holdings Limited, you can compare the effects of market volatilities on Asbury Automotive and Highway Holdings 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 Highway Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asbury Automotive and Highway Holdings.
Diversification Opportunities for Asbury Automotive and Highway Holdings
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Asbury and Highway is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Asbury Automotive Group and Highway Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highway Holdings 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 Highway Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highway Holdings has no effect on the direction of Asbury Automotive i.e., Asbury Automotive and Highway Holdings go up and down completely randomly.
Pair Corralation between Asbury Automotive and Highway Holdings
Considering the 90-day investment horizon Asbury Automotive Group is expected to generate 2.79 times more return on investment than Highway Holdings. However, Asbury Automotive is 2.79 times more volatile than Highway Holdings Limited. It trades about 0.35 of its potential returns per unit of risk. Highway Holdings Limited is currently generating about 0.12 per unit of risk. If you would invest 22,558 in Asbury Automotive Group on August 27, 2024 and sell it today you would earn a total of 4,124 from holding Asbury Automotive Group or generate 18.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asbury Automotive Group vs. Highway Holdings Limited
Performance |
| Timeline |
| Asbury Automotive |
| Highway Holdings |
Asbury Automotive and Highway Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asbury Automotive and Highway Holdings
The main advantage of trading using opposite Asbury Automotive and Highway Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asbury Automotive position performs unexpectedly, Highway Holdings 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 Highway Holdings will offset losses from the drop in Highway Holdings' long position.| Asbury Automotive vs. Kingsway Financial Services | Asbury Automotive vs. KAR Auction Services | Asbury Automotive vs. Cango Inc | Asbury Automotive vs. Vroom Inc |
| Highway Holdings vs. Deswell Industries | Highway Holdings vs. Euro Tech Holdings | Highway Holdings vs. China Natural Resources | Highway Holdings vs. Arts Way Manufacturing Co |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |