Correlation Between U Haul and Asbury Automotive
Can any of the company-specific risk be diversified away by investing in both U Haul 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 U Haul and Asbury Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between U Haul Holding and Asbury Automotive Group, you can compare the effects of market volatilities on U Haul 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 U Haul with a short position of Asbury Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Haul and Asbury Automotive.
Diversification Opportunities for U Haul and Asbury Automotive
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between UHAL and Asbury is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding U Haul Holding and Asbury Automotive Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asbury Automotive and U Haul 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 U Haul Holding 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 U Haul i.e., U Haul and Asbury Automotive go up and down completely randomly.
Pair Corralation between U Haul and Asbury Automotive
Given the investment horizon of 90 days U Haul is expected to generate 2.77 times less return on investment than Asbury Automotive. But when comparing it to its historical volatility, U Haul Holding is 1.26 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 0.04 of returns per unit of risk over similar time horizon. If you would invest 17,978 in Asbury Automotive Group on September 2, 2024 and sell it today you would earn a total of 8,005 from holding Asbury Automotive Group or generate 44.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
U Haul Holding vs. Asbury Automotive Group
Performance |
| Timeline |
| U Haul Holding |
| Asbury Automotive |
U Haul and Asbury Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Haul and Asbury Automotive
The main advantage of trading using opposite U Haul and Asbury Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Haul 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.| U Haul vs. AerCap Holdings NV | U Haul vs. Alta Equipment Group | U Haul vs. PROG Holdings | U Haul vs. GATX Corporation |
| Asbury Automotive vs. Advance Auto Parts | Asbury Automotive vs. Tractor Supply | Asbury Automotive vs. Genuine Parts Co | Asbury Automotive vs. Five Below |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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