Correlation Between AutoNation and Camping World
Can any of the company-specific risk be diversified away by investing in both AutoNation and Camping World 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 AutoNation and Camping World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AutoNation and Camping World Holdings, you can compare the effects of market volatilities on AutoNation and Camping World 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 AutoNation with a short position of Camping World. Check out your portfolio center. Please also check ongoing floating volatility patterns of AutoNation and Camping World.
Diversification Opportunities for AutoNation and Camping World
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AutoNation and Camping is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding AutoNation and Camping World Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camping World Holdings and AutoNation 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 AutoNation are associated (or correlated) with Camping World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camping World Holdings has no effect on the direction of AutoNation i.e., AutoNation and Camping World go up and down completely randomly.
Pair Corralation between AutoNation and Camping World
Allowing for the 90-day total investment horizon AutoNation is expected to generate 0.63 times more return on investment than Camping World. However, AutoNation is 1.58 times less risky than Camping World. It trades about 0.13 of its potential returns per unit of risk. Camping World Holdings is currently generating about -0.08 per unit of risk. If you would invest 16,427 in AutoNation on September 18, 2024 and sell it today you would earn a total of 619.00 from holding AutoNation or generate 3.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AutoNation vs. Camping World Holdings
Performance |
| Timeline |
| AutoNation |
| Camping World Holdings |
AutoNation and Camping World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AutoNation and Camping World
The main advantage of trading using opposite AutoNation and Camping World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AutoNation position performs unexpectedly, Camping World 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 Camping World will offset losses from the drop in Camping World's long position.| AutoNation vs. Sonic Automotive | AutoNation vs. Lithia Motors | AutoNation vs. Asbury Automotive Group | AutoNation vs. Penske Automotive Group |
| Camping World vs. Group 1 Automotive | Camping World vs. Sonic Automotive | Camping World vs. Penske Automotive Group | Camping World vs. Lithia Motors |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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