Correlation Between Duluth Holdings and Asbury Automotive
Can any of the company-specific risk be diversified away by investing in both Duluth Holdings 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 Duluth Holdings and Asbury Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Duluth Holdings and Asbury Automotive Group, you can compare the effects of market volatilities on Duluth Holdings 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 Duluth Holdings with a short position of Asbury Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duluth Holdings and Asbury Automotive.
Diversification Opportunities for Duluth Holdings and Asbury Automotive
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Duluth and Asbury is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Duluth Holdings and Asbury Automotive Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asbury Automotive and Duluth Holdings 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 Duluth Holdings 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 Duluth Holdings i.e., Duluth Holdings and Asbury Automotive go up and down completely randomly.
Pair Corralation between Duluth Holdings and Asbury Automotive
Given the investment horizon of 90 days Duluth Holdings is expected to generate 2.15 times more return on investment than Asbury Automotive. However, Duluth Holdings is 2.15 times more volatile than Asbury Automotive Group. It trades about 0.04 of its potential returns per unit of risk. Asbury Automotive Group is currently generating about -0.04 per unit of risk. If you would invest 331.00 in Duluth Holdings on September 18, 2024 and sell it today you would earn a total of 5.00 from holding Duluth Holdings or generate 1.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Duluth Holdings vs. Asbury Automotive Group
Performance |
| Timeline |
| Duluth Holdings |
| Asbury Automotive |
Duluth Holdings and Asbury Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Duluth Holdings and Asbury Automotive
The main advantage of trading using opposite Duluth Holdings and Asbury Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duluth Holdings 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.| Duluth Holdings vs. Capri Holdings | Duluth Holdings vs. Movado Group | Duluth Holdings vs. Tapestry | Duluth Holdings vs. Brilliant Earth Group |
| Asbury Automotive vs. Sonic Automotive | Asbury Automotive vs. Lithia Motors | Asbury Automotive vs. AutoNation | Asbury Automotive vs. Penske 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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