Correlation Between Marchex and Asbury Automotive
Can any of the company-specific risk be diversified away by investing in both Marchex 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 Marchex and Asbury Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marchex and Asbury Automotive Group, you can compare the effects of market volatilities on Marchex 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 Marchex with a short position of Asbury Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marchex and Asbury Automotive.
Diversification Opportunities for Marchex and Asbury Automotive
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Marchex and Asbury is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Marchex and Asbury Automotive Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asbury Automotive and Marchex 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 Marchex 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 Marchex i.e., Marchex and Asbury Automotive go up and down completely randomly.
Pair Corralation between Marchex and Asbury Automotive
Given the investment horizon of 90 days Marchex is expected to generate 1.77 times less return on investment than Asbury Automotive. In addition to that, Marchex is 1.47 times more volatile than Asbury Automotive Group. It trades about 0.02 of its total potential returns per unit of risk. Asbury Automotive Group is currently generating about 0.05 per unit of volatility. If you would invest 17,896 in Asbury Automotive Group on August 28, 2024 and sell it today you would earn a total of 8,786 from holding Asbury Automotive Group or generate 49.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marchex vs. Asbury Automotive Group
Performance |
| Timeline |
| Marchex |
| Asbury Automotive |
Marchex and Asbury Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marchex and Asbury Automotive
The main advantage of trading using opposite Marchex and Asbury Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marchex 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.| Marchex vs. Entravision Communications | Marchex vs. Direct Digital Holdings | Marchex vs. Cimpress NV | Marchex vs. Townsquare Media |
| Asbury Automotive vs. Kingsway Financial Services | Asbury Automotive vs. KAR Auction Services | Asbury Automotive vs. Cango Inc | Asbury Automotive vs. Vroom Inc |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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