Correlation Between Asbury Automotive and U Haul
Can any of the company-specific risk be diversified away by investing in both Asbury Automotive and U Haul 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 U Haul 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 U Haul Holding, you can compare the effects of market volatilities on Asbury Automotive and U Haul 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 U Haul. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asbury Automotive and U Haul.
Diversification Opportunities for Asbury Automotive and U Haul
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Asbury and UHAL is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Asbury Automotive Group and U Haul Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on U Haul 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 U Haul. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of U Haul Holding has no effect on the direction of Asbury Automotive i.e., Asbury Automotive and U Haul go up and down completely randomly.
Pair Corralation between Asbury Automotive and U Haul
Considering the 90-day investment horizon Asbury Automotive Group is expected to generate 1.26 times more return on investment than U Haul. However, Asbury Automotive is 1.26 times more volatile than U Haul Holding. It trades about 0.04 of its potential returns per unit of risk. U Haul Holding is currently generating about 0.02 per unit of risk. If you would invest 17,978 in Asbury Automotive Group on September 2, 2024 and sell it today you would earn a total of 8,005 from holding Asbury Automotive Group or generate 44.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asbury Automotive Group vs. U Haul Holding
Performance |
| Timeline |
| Asbury Automotive |
| U Haul Holding |
Asbury Automotive and U Haul Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asbury Automotive and U Haul
The main advantage of trading using opposite Asbury Automotive and U Haul positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asbury Automotive position performs unexpectedly, U Haul 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 U Haul will offset losses from the drop in U Haul's long position.| Asbury Automotive vs. Advance Auto Parts | Asbury Automotive vs. Tractor Supply | Asbury Automotive vs. Genuine Parts Co | Asbury Automotive vs. Five Below |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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