Correlation Between Asbury Automotive and Melbana Energy
Can any of the company-specific risk be diversified away by investing in both Asbury Automotive and Melbana Energy 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 Melbana Energy 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 Melbana Energy Limited, you can compare the effects of market volatilities on Asbury Automotive and Melbana Energy 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 Melbana Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asbury Automotive and Melbana Energy.
Diversification Opportunities for Asbury Automotive and Melbana Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Asbury and Melbana is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Asbury Automotive Group and Melbana Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Melbana Energy 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 Melbana Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Melbana Energy has no effect on the direction of Asbury Automotive i.e., Asbury Automotive and Melbana Energy go up and down completely randomly.
Pair Corralation between Asbury Automotive and Melbana Energy
If you would invest 2.00 in Melbana Energy Limited on September 13, 2024 and sell it today you would earn a total of 0.00 from holding Melbana Energy Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asbury Automotive Group vs. Melbana Energy Limited
Performance |
| Timeline |
| Asbury Automotive |
| Melbana Energy |
Asbury Automotive and Melbana Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asbury Automotive and Melbana Energy
The main advantage of trading using opposite Asbury Automotive and Melbana Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asbury Automotive position performs unexpectedly, Melbana Energy 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 Melbana Energy will offset losses from the drop in Melbana Energy'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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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