Correlation Between Asbury Automotive and Spring Valley
Can any of the company-specific risk be diversified away by investing in both Asbury Automotive and Spring Valley 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 Spring Valley 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 Spring Valley Acquisition, you can compare the effects of market volatilities on Asbury Automotive and Spring Valley 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 Spring Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asbury Automotive and Spring Valley.
Diversification Opportunities for Asbury Automotive and Spring Valley
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Asbury and Spring is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Asbury Automotive Group and Spring Valley Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spring Valley Acquisition 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 Spring Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spring Valley Acquisition has no effect on the direction of Asbury Automotive i.e., Asbury Automotive and Spring Valley go up and down completely randomly.
Pair Corralation between Asbury Automotive and Spring Valley
Considering the 90-day investment horizon Asbury Automotive is expected to generate 97.55 times less return on investment than Spring Valley. But when comparing it to its historical volatility, Asbury Automotive Group is 51.62 times less risky than Spring Valley. It trades about 0.05 of its potential returns per unit of risk. Spring Valley Acquisition is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 15.00 in Spring Valley Acquisition on September 5, 2024 and sell it today you would lose (7.99) from holding Spring Valley Acquisition or give up 53.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 56.0% |
| Values | Daily Returns |
Asbury Automotive Group vs. Spring Valley Acquisition
Performance |
| Timeline |
| Asbury Automotive |
| Spring Valley Acquisition |
Asbury Automotive and Spring Valley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asbury Automotive and Spring Valley
The main advantage of trading using opposite Asbury Automotive and Spring Valley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asbury Automotive position performs unexpectedly, Spring Valley 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 Spring Valley will offset losses from the drop in Spring Valley's long position.| Asbury Automotive vs. Sonic Automotive | Asbury Automotive vs. Lithia Motors | Asbury Automotive vs. AutoNation | Asbury Automotive vs. Penske Automotive Group |
| Spring Valley vs. 51Talk Online Education | Spring Valley vs. Asbury Automotive Group | Spring Valley vs. Lululemon Athletica | Spring Valley vs. Coupang LLC |
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.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |