Correlation Between Asbury Automotive and IX Acquisition
Can any of the company-specific risk be diversified away by investing in both Asbury Automotive and IX Acquisition 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 IX Acquisition 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 IX Acquisition Corp, you can compare the effects of market volatilities on Asbury Automotive and IX Acquisition 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 IX Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asbury Automotive and IX Acquisition.
Diversification Opportunities for Asbury Automotive and IX Acquisition
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Asbury and IXAQU is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Asbury Automotive Group and IX Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IX Acquisition Corp 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 IX Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IX Acquisition Corp has no effect on the direction of Asbury Automotive i.e., Asbury Automotive and IX Acquisition go up and down completely randomly.
Pair Corralation between Asbury Automotive and IX Acquisition
Considering the 90-day investment horizon Asbury Automotive Group is expected to generate 2.27 times more return on investment than IX Acquisition. However, Asbury Automotive is 2.27 times more volatile than IX Acquisition Corp. It trades about 0.03 of its potential returns per unit of risk. IX Acquisition Corp is currently generating about 0.02 per unit of risk. If you would invest 22,673 in Asbury Automotive Group on September 2, 2024 and sell it today you would earn a total of 3,310 from holding Asbury Automotive Group or generate 14.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.94% |
| Values | Daily Returns |
Asbury Automotive Group vs. IX Acquisition Corp
Performance |
| Timeline |
| Asbury Automotive |
| IX Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Asbury Automotive and IX Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asbury Automotive and IX Acquisition
The main advantage of trading using opposite Asbury Automotive and IX Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asbury Automotive position performs unexpectedly, IX Acquisition 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 IX Acquisition will offset losses from the drop in IX Acquisition's long position.| Asbury Automotive vs. Advance Auto Parts | Asbury Automotive vs. Tractor Supply | Asbury Automotive vs. Genuine Parts Co | Asbury Automotive vs. Five Below |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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