Correlation Between Asbury Automotive and Sypris Solutions
Can any of the company-specific risk be diversified away by investing in both Asbury Automotive and Sypris Solutions 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 Sypris Solutions 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 Sypris Solutions, you can compare the effects of market volatilities on Asbury Automotive and Sypris Solutions 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 Sypris Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asbury Automotive and Sypris Solutions.
Diversification Opportunities for Asbury Automotive and Sypris Solutions
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Asbury and Sypris is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Asbury Automotive Group and Sypris Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sypris Solutions 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 Sypris Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sypris Solutions has no effect on the direction of Asbury Automotive i.e., Asbury Automotive and Sypris Solutions go up and down completely randomly.
Pair Corralation between Asbury Automotive and Sypris Solutions
Considering the 90-day investment horizon Asbury Automotive Group is expected to generate 0.99 times more return on investment than Sypris Solutions. However, Asbury Automotive Group is 1.01 times less risky than Sypris Solutions. It trades about 0.06 of its potential returns per unit of risk. Sypris Solutions is currently generating about -0.09 per unit of risk. If you would invest 24,406 in Asbury Automotive Group on August 25, 2024 and sell it today you would earn a total of 1,724 from holding Asbury Automotive Group or generate 7.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
Asbury Automotive Group vs. Sypris Solutions
Performance |
| Timeline |
| Asbury Automotive |
| Sypris Solutions |
Asbury Automotive and Sypris Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asbury Automotive and Sypris Solutions
The main advantage of trading using opposite Asbury Automotive and Sypris Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asbury Automotive position performs unexpectedly, Sypris Solutions 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 Sypris Solutions will offset losses from the drop in Sypris Solutions' long position.| Asbury Automotive vs. Kingsway Financial Services | Asbury Automotive vs. KAR Auction Services | Asbury Automotive vs. Cango Inc | Asbury Automotive vs. Vroom Inc |
| Sypris Solutions vs. Monro Muffler Brake | Sypris Solutions vs. Magna International | Sypris Solutions vs. BorgWarner | Sypris Solutions vs. Mobileye Global Class |
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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