Correlation Between Asbury Automotive and SBC Medical
Can any of the company-specific risk be diversified away by investing in both Asbury Automotive and SBC Medical 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 SBC Medical 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 SBC Medical Group, you can compare the effects of market volatilities on Asbury Automotive and SBC Medical 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 SBC Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asbury Automotive and SBC Medical.
Diversification Opportunities for Asbury Automotive and SBC Medical
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Asbury and SBC is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Asbury Automotive Group and SBC Medical Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBC Medical Group 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 SBC Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBC Medical Group has no effect on the direction of Asbury Automotive i.e., Asbury Automotive and SBC Medical go up and down completely randomly.
Pair Corralation between Asbury Automotive and SBC Medical
Considering the 90-day investment horizon Asbury Automotive is expected to generate 1.0 times less return on investment than SBC Medical. But when comparing it to its historical volatility, Asbury Automotive Group is 2.02 times less risky than SBC Medical. It trades about 0.39 of its potential returns per unit of risk. SBC Medical Group is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 24.00 in SBC Medical Group on November 4, 2024 and sell it today you would earn a total of 5.00 from holding SBC Medical Group or generate 20.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Asbury Automotive Group vs. SBC Medical Group
Performance |
| Timeline |
| Asbury Automotive |
| SBC Medical Group |
Asbury Automotive and SBC Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asbury Automotive and SBC Medical
The main advantage of trading using opposite Asbury Automotive and SBC Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asbury Automotive position performs unexpectedly, SBC Medical 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 SBC Medical will offset losses from the drop in SBC Medical's long position.| Asbury Automotive vs. Sonic Automotive | Asbury Automotive vs. Lithia Motors | Asbury Automotive vs. AutoNation | Asbury Automotive vs. Penske Automotive Group |
| SBC Medical vs. Fernhill Beverage | SBC Medical vs. Fidus Investment Corp | SBC Medical vs. Stepstone Group | SBC Medical vs. Bridgford Foods |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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