Correlation Between AutoNation and Live Ventures
Can any of the company-specific risk be diversified away by investing in both AutoNation and Live Ventures 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 Live Ventures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AutoNation and Live Ventures, you can compare the effects of market volatilities on AutoNation and Live Ventures 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 Live Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of AutoNation and Live Ventures.
Diversification Opportunities for AutoNation and Live Ventures
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between AutoNation and Live is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding AutoNation and Live Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Ventures 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 Live Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Ventures has no effect on the direction of AutoNation i.e., AutoNation and Live Ventures go up and down completely randomly.
Pair Corralation between AutoNation and Live Ventures
Allowing for the 90-day total investment horizon AutoNation is expected to generate 0.31 times more return on investment than Live Ventures. However, AutoNation is 3.25 times less risky than Live Ventures. It trades about 0.13 of its potential returns per unit of risk. Live Ventures is currently generating about 0.0 per unit of risk. If you would invest 16,427 in AutoNation on September 19, 2024 and sell it today you would earn a total of 622.00 from holding AutoNation or generate 3.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AutoNation vs. Live Ventures
Performance |
| Timeline |
| AutoNation |
| Live Ventures |
AutoNation and Live Ventures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AutoNation and Live Ventures
The main advantage of trading using opposite AutoNation and Live Ventures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AutoNation position performs unexpectedly, Live Ventures 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 Live Ventures will offset losses from the drop in Live Ventures' long position.| AutoNation vs. Sonic Automotive | AutoNation vs. Lithia Motors | AutoNation vs. Asbury Automotive Group | AutoNation vs. Penske Automotive Group |
| Live Ventures vs. Arhaus Inc | Live Ventures vs. Floor Decor Holdings | Live Ventures vs. Kingfisher plc | Live Ventures vs. Haverty Furniture Companies |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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