Correlation Between AutoNation and Pet Acquisition
Can any of the company-specific risk be diversified away by investing in both AutoNation and Pet Acquisition 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 Pet Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AutoNation and Pet Acquisition LLC, you can compare the effects of market volatilities on AutoNation and Pet Acquisition 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 Pet Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of AutoNation and Pet Acquisition.
Diversification Opportunities for AutoNation and Pet Acquisition
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AutoNation and Pet is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AutoNation and Pet Acquisition LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pet Acquisition LLC 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 Pet Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pet Acquisition LLC has no effect on the direction of AutoNation i.e., AutoNation and Pet Acquisition go up and down completely randomly.
Pair Corralation between AutoNation and Pet Acquisition
Allowing for the 90-day total investment horizon AutoNation is expected to generate 0.41 times more return on investment than Pet Acquisition. However, AutoNation is 2.46 times less risky than Pet Acquisition. It trades about 0.05 of its potential returns per unit of risk. Pet Acquisition LLC is currently generating about -0.01 per unit of risk. If you would invest 11,439 in AutoNation on October 15, 2024 and sell it today you would earn a total of 5,644 from holding AutoNation or generate 49.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AutoNation vs. Pet Acquisition LLC
Performance |
| Timeline |
| AutoNation |
| Pet Acquisition LLC |
AutoNation and Pet Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AutoNation and Pet Acquisition
The main advantage of trading using opposite AutoNation and Pet Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AutoNation position performs unexpectedly, Pet Acquisition 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 Pet Acquisition will offset losses from the drop in Pet Acquisition's long position.| AutoNation vs. Sonic Automotive | AutoNation vs. Lithia Motors | AutoNation vs. Asbury Automotive Group | AutoNation vs. Penske Automotive Group |
| Pet Acquisition vs. RH | Pet Acquisition vs. Dicks Sporting Goods | Pet Acquisition vs. Best Buy Co | Pet Acquisition vs. AutoZone |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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