Correlation Between Asbury Automotive and BBB Foods
Can any of the company-specific risk be diversified away by investing in both Asbury Automotive and BBB Foods 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 BBB Foods 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 BBB Foods, you can compare the effects of market volatilities on Asbury Automotive and BBB Foods 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 BBB Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asbury Automotive and BBB Foods.
Diversification Opportunities for Asbury Automotive and BBB Foods
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Asbury and BBB is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Asbury Automotive Group and BBB Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BBB Foods 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 BBB Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BBB Foods has no effect on the direction of Asbury Automotive i.e., Asbury Automotive and BBB Foods go up and down completely randomly.
Pair Corralation between Asbury Automotive and BBB Foods
Considering the 90-day investment horizon Asbury Automotive Group is expected to generate 1.36 times more return on investment than BBB Foods. However, Asbury Automotive is 1.36 times more volatile than BBB Foods. It trades about 0.35 of its potential returns per unit of risk. BBB Foods is currently generating about 0.0 per unit of risk. If you would invest 22,558 in Asbury Automotive Group on August 27, 2024 and sell it today you would earn a total of 4,124 from holding Asbury Automotive Group or generate 18.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asbury Automotive Group vs. BBB Foods
Performance |
| Timeline |
| Asbury Automotive |
| BBB Foods |
Asbury Automotive and BBB Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asbury Automotive and BBB Foods
The main advantage of trading using opposite Asbury Automotive and BBB Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asbury Automotive position performs unexpectedly, BBB Foods 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 BBB Foods will offset losses from the drop in BBB Foods' long position.| Asbury Automotive vs. Kingsway Financial Services | Asbury Automotive vs. KAR Auction Services | Asbury Automotive vs. Cango Inc | Asbury Automotive vs. Vroom Inc |
| BBB Foods vs. Kaltura | BBB Foods vs. Analog Devices | BBB Foods vs. Sabra Healthcare REIT | BBB Foods vs. Amkor Technology |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |