Correlation Between 51Talk Online and Asbury Automotive
Can any of the company-specific risk be diversified away by investing in both 51Talk Online and Asbury Automotive 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 51Talk Online and Asbury Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 51Talk Online Education and Asbury Automotive Group, you can compare the effects of market volatilities on 51Talk Online and Asbury Automotive 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 51Talk Online with a short position of Asbury Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of 51Talk Online and Asbury Automotive.
Diversification Opportunities for 51Talk Online and Asbury Automotive
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between 51Talk and Asbury is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding 51Talk Online Education and Asbury Automotive Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asbury Automotive and 51Talk Online 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 51Talk Online Education are associated (or correlated) with Asbury Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asbury Automotive has no effect on the direction of 51Talk Online i.e., 51Talk Online and Asbury Automotive go up and down completely randomly.
Pair Corralation between 51Talk Online and Asbury Automotive
Considering the 90-day investment horizon 51Talk Online Education is expected to generate 1.73 times more return on investment than Asbury Automotive. However, 51Talk Online is 1.73 times more volatile than Asbury Automotive Group. It trades about 0.06 of its potential returns per unit of risk. Asbury Automotive Group is currently generating about 0.05 per unit of risk. If you would invest 664.00 in 51Talk Online Education on August 24, 2024 and sell it today you would earn a total of 828.00 from holding 51Talk Online Education or generate 124.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
51Talk Online Education vs. Asbury Automotive Group
Performance |
| Timeline |
| 51Talk Online Education |
| Asbury Automotive |
51Talk Online and Asbury Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 51Talk Online and Asbury Automotive
The main advantage of trading using opposite 51Talk Online and Asbury Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 51Talk Online position performs unexpectedly, Asbury Automotive 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 Asbury Automotive will offset losses from the drop in Asbury Automotive's long position.| 51Talk Online vs. TAL Education Group | 51Talk Online vs. Strategic Education | 51Talk Online vs. Vasta Platform | 51Talk Online vs. Afya |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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