Correlation Between Enersys and Asbury Automotive
Can any of the company-specific risk be diversified away by investing in both Enersys 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 Enersys and Asbury Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enersys and Asbury Automotive Group, you can compare the effects of market volatilities on Enersys 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 Enersys with a short position of Asbury Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enersys and Asbury Automotive.
Diversification Opportunities for Enersys and Asbury Automotive
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Enersys and Asbury is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Enersys and Asbury Automotive Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asbury Automotive and Enersys 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 Enersys 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 Enersys i.e., Enersys and Asbury Automotive go up and down completely randomly.
Pair Corralation between Enersys and Asbury Automotive
Considering the 90-day investment horizon Enersys is expected to generate 2.16 times less return on investment than Asbury Automotive. But when comparing it to its historical volatility, Enersys is 1.29 times less risky than Asbury Automotive. It trades about 0.03 of its potential returns per unit of risk. Asbury Automotive Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 22,482 in Asbury Automotive Group on September 3, 2024 and sell it today you would earn a total of 3,501 from holding Asbury Automotive Group or generate 15.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enersys vs. Asbury Automotive Group
Performance |
| Timeline |
| Enersys |
| Asbury Automotive |
Enersys and Asbury Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enersys and Asbury Automotive
The main advantage of trading using opposite Enersys and Asbury Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enersys 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.| Enersys vs. Advanced Energy Industries | Enersys vs. Hubbell | Enersys vs. Acuity Brands | Enersys vs. Kimball Electronics |
| 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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |