Correlation Between GAMCO Global and Asbury Automotive
Can any of the company-specific risk be diversified away by investing in both GAMCO Global 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 GAMCO Global and Asbury Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GAMCO Global Gold and Asbury Automotive Group, you can compare the effects of market volatilities on GAMCO Global 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 GAMCO Global with a short position of Asbury Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMCO Global and Asbury Automotive.
Diversification Opportunities for GAMCO Global and Asbury Automotive
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GAMCO and Asbury is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding GAMCO Global Gold and Asbury Automotive Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asbury Automotive and GAMCO Global 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 GAMCO Global Gold 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 GAMCO Global i.e., GAMCO Global and Asbury Automotive go up and down completely randomly.
Pair Corralation between GAMCO Global and Asbury Automotive
Assuming the 90 days trading horizon GAMCO Global is expected to generate 84.32 times less return on investment than Asbury Automotive. But when comparing it to its historical volatility, GAMCO Global Gold is 4.64 times less risky than Asbury Automotive. It trades about 0.02 of its potential returns per unit of risk. Asbury Automotive Group is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 22,798 in Asbury Automotive Group on September 2, 2024 and sell it today you would earn a total of 3,185 from holding Asbury Automotive Group or generate 13.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GAMCO Global Gold vs. Asbury Automotive Group
Performance |
| Timeline |
| GAMCO Global Gold |
| Asbury Automotive |
GAMCO Global and Asbury Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GAMCO Global and Asbury Automotive
The main advantage of trading using opposite GAMCO Global and Asbury Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAMCO Global 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.| GAMCO Global vs. The Gabelli Equity | GAMCO Global vs. The Gabelli Equity | GAMCO Global vs. The Gabelli Utility | GAMCO Global vs. Bancroft Fund |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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