Correlation Between Asbury Automotive and Upbound
Can any of the company-specific risk be diversified away by investing in both Asbury Automotive and Upbound 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 Upbound 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 Upbound Group, you can compare the effects of market volatilities on Asbury Automotive and Upbound 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 Upbound. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asbury Automotive and Upbound.
Diversification Opportunities for Asbury Automotive and Upbound
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Asbury and Upbound is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Asbury Automotive Group and Upbound Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Upbound Group 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 Upbound. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Upbound Group has no effect on the direction of Asbury Automotive i.e., Asbury Automotive and Upbound go up and down completely randomly.
Pair Corralation between Asbury Automotive and Upbound
Considering the 90-day investment horizon Asbury Automotive Group is expected to generate 1.5 times more return on investment than Upbound. However, Asbury Automotive is 1.5 times more volatile than Upbound Group. It trades about 0.04 of its potential returns per unit of risk. Upbound Group is currently generating about -0.24 per unit of risk. If you would invest 27,112 in Asbury Automotive Group on November 28, 2024 and sell it today you would earn a total of 442.00 from holding Asbury Automotive Group or generate 1.63% 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. Upbound Group
Performance |
| Timeline |
| Asbury Automotive |
| Upbound Group |
Asbury Automotive and Upbound Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asbury Automotive and Upbound
The main advantage of trading using opposite Asbury Automotive and Upbound positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asbury Automotive position performs unexpectedly, Upbound 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 Upbound will offset losses from the drop in Upbound's long position.| Asbury Automotive vs. Sonic Automotive | Asbury Automotive vs. Lithia Motors | Asbury Automotive vs. AutoNation | Asbury Automotive vs. Penske Automotive Group |
| Upbound vs. JBG SMITH Properties | Upbound vs. Lincoln Electric Holdings | Upbound vs. Toro Co | Upbound vs. Rocky Brands |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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