Correlation Between AutoNation and RumbleON
Can any of the company-specific risk be diversified away by investing in both AutoNation and RumbleON 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 RumbleON into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AutoNation and RumbleON, you can compare the effects of market volatilities on AutoNation and RumbleON 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 RumbleON. Check out your portfolio center. Please also check ongoing floating volatility patterns of AutoNation and RumbleON.
Diversification Opportunities for AutoNation and RumbleON
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between AutoNation and RumbleON is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding AutoNation and RumbleON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RumbleON 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 RumbleON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RumbleON has no effect on the direction of AutoNation i.e., AutoNation and RumbleON go up and down completely randomly.
Pair Corralation between AutoNation and RumbleON
Allowing for the 90-day total investment horizon AutoNation is expected to generate 0.4 times more return on investment than RumbleON. However, AutoNation is 2.5 times less risky than RumbleON. It trades about 0.05 of its potential returns per unit of risk. RumbleON is currently generating about 0.02 per unit of risk. If you would invest 11,935 in AutoNation on August 28, 2024 and sell it today you would earn a total of 6,023 from holding AutoNation or generate 50.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AutoNation vs. RumbleON
Performance |
| Timeline |
| AutoNation |
| RumbleON |
AutoNation and RumbleON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AutoNation and RumbleON
The main advantage of trading using opposite AutoNation and RumbleON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AutoNation position performs unexpectedly, RumbleON 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 RumbleON will offset losses from the drop in RumbleON's long position.| AutoNation vs. Kingsway Financial Services | AutoNation vs. KAR Auction Services | AutoNation vs. Cango Inc | AutoNation vs. Vroom Inc |
| RumbleON vs. Group 1 Automotive | RumbleON vs. Penske Automotive Group | RumbleON vs. Lithia Motors | RumbleON vs. AutoNation |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |