Correlation Between Corsair Gaming and Asbury Automotive

Can any of the company-specific risk be diversified away by investing in both Corsair Gaming 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 Corsair Gaming and Asbury Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Corsair Gaming and Asbury Automotive Group, you can compare the effects of market volatilities on Corsair Gaming 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 Corsair Gaming with a short position of Asbury Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corsair Gaming and Asbury Automotive.

Diversification Opportunities for Corsair Gaming and Asbury Automotive

-0.05

Correlation Coefficient

Corsair Gaming  Asbury Automotive

Good diversification

The 3 months correlation between Corsair and Asbury is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Corsair Gaming and Asbury Automotive Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asbury Automotive and Corsair Gaming 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 Corsair Gaming 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 Corsair Gaming i.e., Corsair Gaming and Asbury Automotive go up and down completely randomly.

Pair Corralation between Corsair Gaming and Asbury Automotive

Assuming the 90 days horizon Corsair Gaming is expected to under-perform the Asbury Automotive. In addition to that, Corsair Gaming is 1.32 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 0.02 per unit of volatility. If you would invest  22,400  in Asbury Automotive Group on October 26, 2024 and sell it today you would earn a total of  2,200  from holding Asbury Automotive Group or generate 9.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Corsair Gaming  vs.  Asbury Automotive Group

Corsair Gaming

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Corsair Gaming are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Corsair Gaming reported solid returns over the last few months and may actually be approaching a breakup point.

Asbury Automotive

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Asbury Automotive Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Asbury Automotive reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Corsair Gaming and Asbury Automotive

The main advantage of trading using opposite Corsair Gaming and Asbury Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corsair Gaming 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 Corsair Gaming 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.

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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.