Correlation Between Asbury Automotive and Sonida Senior
Can any of the company-specific risk be diversified away by investing in both Asbury Automotive and Sonida Senior 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 Sonida Senior 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 Sonida Senior Living, you can compare the effects of market volatilities on Asbury Automotive and Sonida Senior 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 Sonida Senior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asbury Automotive and Sonida Senior.
Diversification Opportunities for Asbury Automotive and Sonida Senior
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Asbury and Sonida is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Asbury Automotive Group and Sonida Senior Living in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonida Senior Living 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 Sonida Senior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sonida Senior Living has no effect on the direction of Asbury Automotive i.e., Asbury Automotive and Sonida Senior go up and down completely randomly.
Pair Corralation between Asbury Automotive and Sonida Senior
Considering the 90-day investment horizon Asbury Automotive Group is expected to generate 0.59 times more return on investment than Sonida Senior. However, Asbury Automotive Group is 1.69 times less risky than Sonida Senior. It trades about 0.04 of its potential returns per unit of risk. Sonida Senior Living is currently generating about 0.01 per unit of risk. If you would invest 23,773 in Asbury Automotive Group on September 2, 2024 and sell it today you would earn a total of 2,210 from holding Asbury Automotive Group or generate 9.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asbury Automotive Group vs. Sonida Senior Living
Performance |
| Timeline |
| Asbury Automotive |
| Sonida Senior Living |
Asbury Automotive and Sonida Senior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asbury Automotive and Sonida Senior
The main advantage of trading using opposite Asbury Automotive and Sonida Senior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asbury Automotive position performs unexpectedly, Sonida Senior 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 Sonida Senior will offset losses from the drop in Sonida Senior's long position.| Asbury Automotive vs. Advance Auto Parts | Asbury Automotive vs. Tractor Supply | Asbury Automotive vs. Genuine Parts Co | Asbury Automotive vs. Five Below |
| Sonida Senior vs. Select Medical Holdings | Sonida Senior vs. Encompass Health Corp | Sonida Senior vs. Pennant Group | Sonida Senior vs. InnovAge Holding Corp |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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