Correlation Between J Long and Asbury Automotive
Can any of the company-specific risk be diversified away by investing in both J Long 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 J Long and Asbury Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between J Long Group Limited and Asbury Automotive Group, you can compare the effects of market volatilities on J Long 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 J Long with a short position of Asbury Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of J Long and Asbury Automotive.
Diversification Opportunities for J Long and Asbury Automotive
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between J Long and Asbury is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding J Long Group Limited and Asbury Automotive Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asbury Automotive and J Long 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 J Long Group Limited 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 J Long i.e., J Long and Asbury Automotive go up and down completely randomly.
Pair Corralation between J Long and Asbury Automotive
Allowing for the 90-day total investment horizon J Long Group Limited is expected to under-perform the Asbury Automotive. In addition to that, J Long is 6.05 times more volatile than Asbury Automotive Group. It trades about -0.14 of its total potential returns per unit of risk. Asbury Automotive Group is currently generating about -0.04 per unit of volatility. If you would invest 25,590 in Asbury Automotive Group on September 18, 2024 and sell it today you would lose (360.00) from holding Asbury Automotive Group or give up 1.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
J Long Group Limited vs. Asbury Automotive Group
Performance |
| Timeline |
| J Long Group |
| Asbury Automotive |
J Long and Asbury Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J Long and Asbury Automotive
The main advantage of trading using opposite J Long and Asbury Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J Long 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.| J Long vs. RadNet Inc | J Long vs. Merit Medical Systems | J Long vs. BioNTech SE | J Long vs. Seadrill Limited |
| 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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