Correlation Between Asbury Automotive and Jutal Offshore

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

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

Diversification Opportunities for Asbury Automotive and Jutal Offshore

0.0

Correlation Coefficient

Asbury Automotive  Jutal Offshore

Pay attention - limited upside

The 3 months correlation between Asbury and Jutal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Asbury Automotive Group and Jutal Offshore Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jutal Offshore Oil and Asbury Automotive 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 Asbury Automotive Group are associated (or correlated) with Jutal Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jutal Offshore Oil has no effect on the direction of Asbury Automotive i.e., Asbury Automotive and Jutal Offshore go up and down completely randomly.

Pair Corralation between Asbury Automotive and Jutal Offshore

Considering the 90-day investment horizon Asbury Automotive is expected to generate 2.45 times less return on investment than Jutal Offshore. But when comparing it to its historical volatility, Asbury Automotive Group is 2.12 times less risky than Jutal Offshore. It trades about 0.04 of its potential returns per unit of risk. Jutal Offshore Oil is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,558  in Jutal Offshore Oil on October 2, 2024 and sell it today you would earn a total of  523.00  from holding Jutal Offshore Oil or generate 33.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.57%
Values	Daily Returns

Asbury Automotive Group  vs.  Jutal Offshore Oil

Asbury Automotive

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Asbury Automotive Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent fundamental drivers, Asbury Automotive may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Jutal Offshore Oil

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jutal Offshore Oil are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Jutal Offshore may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Asbury Automotive and Jutal Offshore

The main advantage of trading using opposite Asbury Automotive and Jutal Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asbury Automotive position performs unexpectedly, Jutal Offshore 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 Jutal Offshore will offset losses from the drop in Jutal Offshore's long position.

The idea behind Asbury Automotive Group and Jutal Offshore Oil 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.