Correlation Between USS and Asbury Automotive
Can any of the company-specific risk be diversified away by investing in both USS 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 USS and Asbury Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between USS Co and Asbury Automotive Group, you can compare the effects of market volatilities on USS 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 USS with a short position of Asbury Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of USS and Asbury Automotive.
Diversification Opportunities for USS and Asbury Automotive
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between USS and Asbury is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding USS Co and Asbury Automotive Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asbury Automotive and USS 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 USS Co 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 USS i.e., USS and Asbury Automotive go up and down completely randomly.
Pair Corralation between USS and Asbury Automotive
Assuming the 90 days horizon USS Co is expected to generate 0.71 times more return on investment than Asbury Automotive. However, USS Co is 1.42 times less risky than Asbury Automotive. It trades about -0.16 of its potential returns per unit of risk. Asbury Automotive Group is currently generating about -0.25 per unit of risk. If you would invest 860.00 in USS Co on September 24, 2024 and sell it today you would lose (25.00) from holding USS Co or give up 2.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
USS Co vs. Asbury Automotive Group
Performance |
| Timeline |
| USS Co |
| Asbury Automotive |
USS and Asbury Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USS and Asbury Automotive
The main advantage of trading using opposite USS and Asbury Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USS 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.The idea behind USS Co and Asbury Automotive Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Asbury Automotive vs. Copart Inc | Asbury Automotive vs. Zhongsheng Group Holdings | Asbury Automotive vs. CarMax Inc | Asbury Automotive vs. DIeteren Group SA |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |