Correlation Between Asbury Automotive and NCR Corp
Can any of the company-specific risk be diversified away by investing in both Asbury Automotive and NCR Corp 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 NCR Corp 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 NCR Corp Pref, you can compare the effects of market volatilities on Asbury Automotive and NCR Corp 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 NCR Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asbury Automotive and NCR Corp.
Diversification Opportunities for Asbury Automotive and NCR Corp
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Asbury and NCR is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Asbury Automotive Group and NCR Corp Pref in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NCR Corp Pref 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 NCR Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NCR Corp Pref has no effect on the direction of Asbury Automotive i.e., Asbury Automotive and NCR Corp go up and down completely randomly.
Pair Corralation between Asbury Automotive and NCR Corp
Considering the 90-day investment horizon Asbury Automotive is expected to generate 1.3 times less return on investment than NCR Corp. In addition to that, Asbury Automotive is 1.08 times more volatile than NCR Corp Pref. It trades about 0.05 of its total potential returns per unit of risk. NCR Corp Pref is currently generating about 0.06 per unit of volatility. If you would invest 81,472 in NCR Corp Pref on September 3, 2024 and sell it today you would earn a total of 35,653 from holding NCR Corp Pref or generate 43.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 61.62% |
| Values | Daily Returns |
Asbury Automotive Group vs. NCR Corp Pref
Performance |
| Timeline |
| Asbury Automotive |
| NCR Corp Pref |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Asbury Automotive and NCR Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asbury Automotive and NCR Corp
The main advantage of trading using opposite Asbury Automotive and NCR Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asbury Automotive position performs unexpectedly, NCR Corp 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 NCR Corp will offset losses from the drop in NCR Corp'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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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