Correlation Between Asbury Automotive and Weibo Corp
Can any of the company-specific risk be diversified away by investing in both Asbury Automotive and Weibo Corp 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 Weibo Corp 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 Weibo Corp, you can compare the effects of market volatilities on Asbury Automotive and Weibo Corp 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 Weibo Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asbury Automotive and Weibo Corp.
Diversification Opportunities for Asbury Automotive and Weibo Corp
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Asbury and Weibo is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Asbury Automotive Group and Weibo Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weibo Corp 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 Weibo Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weibo Corp has no effect on the direction of Asbury Automotive i.e., Asbury Automotive and Weibo Corp go up and down completely randomly.
Pair Corralation between Asbury Automotive and Weibo Corp
Considering the 90-day investment horizon Asbury Automotive Group is expected to generate 1.18 times more return on investment than Weibo Corp. However, Asbury Automotive is 1.18 times more volatile than Weibo Corp. It trades about 0.37 of its potential returns per unit of risk. Weibo Corp is currently generating about 0.32 per unit of risk. If you would invest 24,199 in Asbury Automotive Group on November 9, 2024 and sell it today you would earn a total of 6,114 from holding Asbury Automotive Group or generate 25.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asbury Automotive Group vs. Weibo Corp
Performance |
| Timeline |
| Asbury Automotive |
| Weibo Corp |
Asbury Automotive and Weibo Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asbury Automotive and Weibo Corp
The main advantage of trading using opposite Asbury Automotive and Weibo Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asbury Automotive position performs unexpectedly, Weibo Corp 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 Weibo Corp will offset losses from the drop in Weibo Corp's long position.| Asbury Automotive vs. Sonic Automotive | Asbury Automotive vs. Lithia Motors | Asbury Automotive vs. AutoNation | Asbury Automotive vs. Penske Automotive Group |
| Weibo Corp vs. YY Inc Class | Weibo Corp vs. DouYu International Holdings | Weibo Corp vs. Tencent Music Entertainment | Weibo Corp vs. Autohome |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |