Correlation Between Red Branch and Asbury Automotive
Can any of the company-specific risk be diversified away by investing in both Red Branch 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 Red Branch and Asbury Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Red Branch Technologies and Asbury Automotive Group, you can compare the effects of market volatilities on Red Branch 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 Red Branch with a short position of Asbury Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Red Branch and Asbury Automotive.
Diversification Opportunities for Red Branch and Asbury Automotive
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Red and Asbury is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Red Branch Technologies and Asbury Automotive Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asbury Automotive and Red Branch 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 Red Branch Technologies 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 Red Branch i.e., Red Branch and Asbury Automotive go up and down completely randomly.
Pair Corralation between Red Branch and Asbury Automotive
Given the investment horizon of 90 days Red Branch Technologies is expected to under-perform the Asbury Automotive. In addition to that, Red Branch is 2.32 times more volatile than Asbury Automotive Group. It trades about -0.12 of its total potential returns per unit of risk. Asbury Automotive Group is currently generating about 0.06 per unit of volatility. If you would invest 24,220 in Asbury Automotive Group on August 29, 2024 and sell it today you would earn a total of 1,783 from holding Asbury Automotive Group or generate 7.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Red Branch Technologies vs. Asbury Automotive Group
Performance |
| Timeline |
| Red Branch Technologies |
| Asbury Automotive |
Red Branch and Asbury Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Red Branch and Asbury Automotive
The main advantage of trading using opposite Red Branch and Asbury Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Red Branch 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.| Red Branch vs. HeartCore Enterprises | Red Branch vs. Trust Stamp | Red Branch vs. Quhuo | Red Branch vs. C3 Ai Inc |
| 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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