Correlation Between Asbury Automotive and SRIVARU Holding
Can any of the company-specific risk be diversified away by investing in both Asbury Automotive and SRIVARU Holding 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 SRIVARU Holding 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 SRIVARU Holding Limited, you can compare the effects of market volatilities on Asbury Automotive and SRIVARU Holding 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 SRIVARU Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asbury Automotive and SRIVARU Holding.
Diversification Opportunities for Asbury Automotive and SRIVARU Holding
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Asbury and SRIVARU is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Asbury Automotive Group and SRIVARU Holding Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SRIVARU Holding 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 SRIVARU Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SRIVARU Holding has no effect on the direction of Asbury Automotive i.e., Asbury Automotive and SRIVARU Holding go up and down completely randomly.
Pair Corralation between Asbury Automotive and SRIVARU Holding
Considering the 90-day investment horizon Asbury Automotive is expected to generate 34.89 times less return on investment than SRIVARU Holding. But when comparing it to its historical volatility, Asbury Automotive Group is 14.22 times less risky than SRIVARU Holding. It trades about 0.05 of its potential returns per unit of risk. SRIVARU Holding Limited is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1.69 in SRIVARU Holding Limited on September 3, 2024 and sell it today you would lose (0.25) from holding SRIVARU Holding Limited or give up 14.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 84.34% |
| Values | Daily Returns |
Asbury Automotive Group vs. SRIVARU Holding Limited
Performance |
| Timeline |
| Asbury Automotive |
| SRIVARU Holding |
Asbury Automotive and SRIVARU Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asbury Automotive and SRIVARU Holding
The main advantage of trading using opposite Asbury Automotive and SRIVARU Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asbury Automotive position performs unexpectedly, SRIVARU Holding 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 SRIVARU Holding will offset losses from the drop in SRIVARU Holding'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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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