Correlation Between Asbury Automotive and Uber Technologies
Can any of the company-specific risk be diversified away by investing in both Asbury Automotive and Uber Technologies 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 Uber Technologies 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 Uber Technologies, you can compare the effects of market volatilities on Asbury Automotive and Uber Technologies 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 Uber Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asbury Automotive and Uber Technologies.
Diversification Opportunities for Asbury Automotive and Uber Technologies
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Asbury and Uber is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Asbury Automotive Group and Uber Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uber Technologies 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 Uber Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uber Technologies has no effect on the direction of Asbury Automotive i.e., Asbury Automotive and Uber Technologies go up and down completely randomly.
Pair Corralation between Asbury Automotive and Uber Technologies
Considering the 90-day investment horizon Asbury Automotive is expected to generate 14.09 times less return on investment than Uber Technologies. But when comparing it to its historical volatility, Asbury Automotive Group is 1.36 times less risky than Uber Technologies. It trades about 0.03 of its potential returns per unit of risk. Uber Technologies is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 6,123 in Uber Technologies on October 19, 2024 and sell it today you would earn a total of 611.00 from holding Uber Technologies or generate 9.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asbury Automotive Group vs. Uber Technologies
Performance |
| Timeline |
| Asbury Automotive |
| Uber Technologies |
Asbury Automotive and Uber Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asbury Automotive and Uber Technologies
The main advantage of trading using opposite Asbury Automotive and Uber Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asbury Automotive position performs unexpectedly, Uber Technologies 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 Uber Technologies will offset losses from the drop in Uber Technologies' long position.| Asbury Automotive vs. Sonic Automotive | Asbury Automotive vs. Lithia Motors | Asbury Automotive vs. AutoNation | Asbury Automotive vs. Penske Automotive Group |
| Uber Technologies vs. Zoom Video Communications | Uber Technologies vs. Snowflake | Uber Technologies vs. Workday | Uber Technologies vs. C3 Ai Inc |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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