Correlation Between AutoNation and Lazydays Holdings
Can any of the company-specific risk be diversified away by investing in both AutoNation and Lazydays Holdings 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 Lazydays Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AutoNation and Lazydays Holdings, you can compare the effects of market volatilities on AutoNation and Lazydays Holdings 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 Lazydays Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of AutoNation and Lazydays Holdings.
Diversification Opportunities for AutoNation and Lazydays Holdings
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AutoNation and Lazydays is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding AutoNation and Lazydays Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazydays 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 Lazydays Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazydays Holdings has no effect on the direction of AutoNation i.e., AutoNation and Lazydays Holdings go up and down completely randomly.
Pair Corralation between AutoNation and Lazydays Holdings
Allowing for the 90-day total investment horizon AutoNation is expected to under-perform the Lazydays Holdings. But the stock apears to be less risky and, when comparing its historical volatility, AutoNation is 5.33 times less risky than Lazydays Holdings. The stock trades about -0.23 of its potential returns per unit of risk. The Lazydays Holdings is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 94.00 in Lazydays Holdings on October 7, 2024 and sell it today you would lose (6.00) from holding Lazydays Holdings or give up 6.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AutoNation vs. Lazydays Holdings
Performance |
| Timeline |
| AutoNation |
| Lazydays Holdings |
AutoNation and Lazydays Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AutoNation and Lazydays Holdings
The main advantage of trading using opposite AutoNation and Lazydays Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AutoNation position performs unexpectedly, Lazydays Holdings 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 Lazydays Holdings will offset losses from the drop in Lazydays Holdings' long position.| AutoNation vs. Sonic Automotive | AutoNation vs. Lithia Motors | AutoNation vs. Asbury Automotive Group | AutoNation vs. Penske Automotive Group |
| Lazydays Holdings vs. Group 1 Automotive | Lazydays Holdings vs. Sonic Automotive | Lazydays Holdings vs. Penske Automotive Group | Lazydays Holdings vs. Asbury Automotive Group |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |