Correlation Between Asbury Automotive and Oatly Group
Can any of the company-specific risk be diversified away by investing in both Asbury Automotive and Oatly Group 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 Oatly Group 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 Oatly Group AB, you can compare the effects of market volatilities on Asbury Automotive and Oatly Group 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 Oatly Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asbury Automotive and Oatly Group.
Diversification Opportunities for Asbury Automotive and Oatly Group
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Asbury and Oatly is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Asbury Automotive Group and Oatly Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oatly Group AB 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 Oatly Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oatly Group AB has no effect on the direction of Asbury Automotive i.e., Asbury Automotive and Oatly Group go up and down completely randomly.
Pair Corralation between Asbury Automotive and Oatly Group
Considering the 90-day investment horizon Asbury Automotive Group is expected to generate 0.58 times more return on investment than Oatly Group. However, Asbury Automotive Group is 1.73 times less risky than Oatly Group. It trades about 0.04 of its potential returns per unit of risk. Oatly Group AB is currently generating about -0.05 per unit of risk. If you would invest 23,673 in Asbury Automotive Group on September 3, 2024 and sell it today you would earn a total of 2,310 from holding Asbury Automotive Group or generate 9.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asbury Automotive Group vs. Oatly Group AB
Performance |
| Timeline |
| Asbury Automotive |
| Oatly Group AB |
Asbury Automotive and Oatly Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asbury Automotive and Oatly Group
The main advantage of trading using opposite Asbury Automotive and Oatly Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asbury Automotive position performs unexpectedly, Oatly Group 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 Oatly Group will offset losses from the drop in Oatly Group'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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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