Correlation Between Asbury Automotive and HWH International
Can any of the company-specific risk be diversified away by investing in both Asbury Automotive and HWH International 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 HWH International 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 HWH International, you can compare the effects of market volatilities on Asbury Automotive and HWH International 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 HWH International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asbury Automotive and HWH International.
Diversification Opportunities for Asbury Automotive and HWH International
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Asbury and HWH is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Asbury Automotive Group and HWH International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HWH International 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 HWH International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HWH International has no effect on the direction of Asbury Automotive i.e., Asbury Automotive and HWH International go up and down completely randomly.
Pair Corralation between Asbury Automotive and HWH International
Considering the 90-day investment horizon Asbury Automotive is expected to generate 10.42 times less return on investment than HWH International. But when comparing it to its historical volatility, Asbury Automotive Group is 6.07 times less risky than HWH International. It trades about 0.08 of its potential returns per unit of risk. HWH International is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 50.00 in HWH International on August 31, 2024 and sell it today you would earn a total of 45.00 from holding HWH International or generate 90.0% 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. HWH International
Performance |
| Timeline |
| Asbury Automotive |
| HWH International |
Asbury Automotive and HWH International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asbury Automotive and HWH International
The main advantage of trading using opposite Asbury Automotive and HWH International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asbury Automotive position performs unexpectedly, HWH International 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 HWH International will offset losses from the drop in HWH International's long position.| Asbury Automotive vs. Sonic Automotive | Asbury Automotive vs. Lithia Motors | Asbury Automotive vs. AutoNation | Asbury Automotive vs. Penske Automotive Group |
| HWH International vs. Radcom | HWH International vs. Iridium Communications | HWH International vs. Rumble Inc | HWH International vs. Kaltura |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| CEOs Directory Screen CEOs from public companies around the world |