Correlation Between Asbury Automotive and Stepstone
Can any of the company-specific risk be diversified away by investing in both Asbury Automotive and Stepstone 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 Stepstone 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 Stepstone Group, you can compare the effects of market volatilities on Asbury Automotive and Stepstone 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 Stepstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asbury Automotive and Stepstone.
Diversification Opportunities for Asbury Automotive and Stepstone
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Asbury and Stepstone is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Asbury Automotive Group and Stepstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stepstone 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 Stepstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stepstone Group has no effect on the direction of Asbury Automotive i.e., Asbury Automotive and Stepstone go up and down completely randomly.
Pair Corralation between Asbury Automotive and Stepstone
Considering the 90-day investment horizon Asbury Automotive Group is expected to generate 0.76 times more return on investment than Stepstone. However, Asbury Automotive Group is 1.31 times less risky than Stepstone. It trades about 0.32 of its potential returns per unit of risk. Stepstone Group is currently generating about 0.13 per unit of risk. If you would invest 22,558 in Asbury Automotive Group on August 28, 2024 and sell it today you would earn a total of 3,814 from holding Asbury Automotive Group or generate 16.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asbury Automotive Group vs. Stepstone Group
Performance |
| Timeline |
| Asbury Automotive |
| Stepstone Group |
Asbury Automotive and Stepstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asbury Automotive and Stepstone
The main advantage of trading using opposite Asbury Automotive and Stepstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asbury Automotive position performs unexpectedly, Stepstone 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 Stepstone will offset losses from the drop in Stepstone's long position.| Asbury Automotive vs. Sonic Automotive | Asbury Automotive vs. Lithia Motors | Asbury Automotive vs. AutoNation | Asbury Automotive vs. Penske Automotive Group |
| Stepstone vs. Munivest Fund | Stepstone vs. Blackrock Muniyield Quality | Stepstone vs. Federated Investors B | Stepstone vs. Federated Premier Municipal |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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