Correlation Between Asbury Automotive and Kulicke
Can any of the company-specific risk be diversified away by investing in both Asbury Automotive and Kulicke 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 Kulicke 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 Kulicke and Soffa, you can compare the effects of market volatilities on Asbury Automotive and Kulicke 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 Kulicke. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asbury Automotive and Kulicke.
Diversification Opportunities for Asbury Automotive and Kulicke
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Asbury and Kulicke is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Asbury Automotive Group and Kulicke and Soffa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kulicke and Soffa 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 Kulicke. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kulicke and Soffa has no effect on the direction of Asbury Automotive i.e., Asbury Automotive and Kulicke go up and down completely randomly.
Pair Corralation between Asbury Automotive and Kulicke
Considering the 90-day investment horizon Asbury Automotive Group is expected to generate 0.93 times more return on investment than Kulicke. However, Asbury Automotive Group is 1.07 times less risky than Kulicke. It trades about 0.25 of its potential returns per unit of risk. Kulicke and Soffa is currently generating about 0.21 per unit of risk. If you would invest 23,698 in Asbury Automotive Group on September 4, 2024 and sell it today you would earn a total of 2,804 from holding Asbury Automotive Group or generate 11.83% 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. Kulicke and Soffa
Performance |
| Timeline |
| Asbury Automotive |
| Kulicke and Soffa |
Asbury Automotive and Kulicke Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asbury Automotive and Kulicke
The main advantage of trading using opposite Asbury Automotive and Kulicke positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asbury Automotive position performs unexpectedly, Kulicke 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 Kulicke will offset losses from the drop in Kulicke's long position.| Asbury Automotive vs. Sonic Automotive | Asbury Automotive vs. Lithia Motors | Asbury Automotive vs. AutoNation | Asbury Automotive vs. Penske Automotive Group |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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