Correlation Between Toshiba and Asbury Automotive
Can any of the company-specific risk be diversified away by investing in both Toshiba 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 Toshiba and Asbury Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Toshiba and Asbury Automotive Group, you can compare the effects of market volatilities on Toshiba 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 Toshiba with a short position of Asbury Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Toshiba and Asbury Automotive.
Diversification Opportunities for Toshiba and Asbury Automotive
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Toshiba and Asbury is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Toshiba and Asbury Automotive Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asbury Automotive and Toshiba 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 Toshiba 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 Toshiba i.e., Toshiba and Asbury Automotive go up and down completely randomly.
Pair Corralation between Toshiba and Asbury Automotive
Assuming the 90 days horizon Toshiba is expected to under-perform the Asbury Automotive. But the pink sheet apears to be less risky and, when comparing its historical volatility, Toshiba is 1.59 times less risky than Asbury Automotive. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Asbury Automotive Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 19,354 in Asbury Automotive Group on September 3, 2024 and sell it today you would earn a total of 6,629 from holding Asbury Automotive Group or generate 34.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 27.79% |
| Values | Daily Returns |
Toshiba vs. Asbury Automotive Group
Performance |
| Timeline |
| Toshiba |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Asbury Automotive |
Toshiba and Asbury Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Toshiba and Asbury Automotive
The main advantage of trading using opposite Toshiba and Asbury Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Toshiba 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.| Toshiba vs. Chester Mining | Toshiba vs. Ambev SA ADR | Toshiba vs. Ispire Technology Common | Toshiba vs. Papaya Growth Opportunity |
| 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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