Correlation Between Asbury Automotive and NESNVX

Can any of the company-specific risk be diversified away by investing in both Asbury Automotive and NESNVX 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 NESNVX 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 NESNVX 525 13 MAR 26, you can compare the effects of market volatilities on Asbury Automotive and NESNVX 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 NESNVX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asbury Automotive and NESNVX.

Diversification Opportunities for Asbury Automotive and NESNVX

-0.66

Correlation Coefficient

Asbury Automotive  NESNVX

Excellent diversification

The 3 months correlation between Asbury and NESNVX is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Asbury Automotive Group and NESNVX 525 13 MAR 26 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NESNVX 525 13 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 NESNVX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NESNVX 525 13 has no effect on the direction of Asbury Automotive i.e., Asbury Automotive and NESNVX go up and down completely randomly.

Pair Corralation between Asbury Automotive and NESNVX

Considering the 90-day investment horizon Asbury Automotive Group is expected to generate 10.36 times more return on investment than NESNVX. However, Asbury Automotive is 10.36 times more volatile than NESNVX 525 13 MAR 26. It trades about 0.04 of its potential returns per unit of risk. NESNVX 525 13 MAR 26 is currently generating about -0.02 per unit of risk. If you would invest  18,424  in Asbury Automotive Group on September 30, 2024 and sell it today you would earn a total of  6,029  from holding Asbury Automotive Group or generate 32.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	63.18%
Values	Daily Returns

Asbury Automotive Group  vs.  NESNVX 525 13 MAR 26

Asbury Automotive

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Asbury Automotive Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental drivers, Asbury Automotive is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

NESNVX 525 13

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NESNVX 525 13 MAR 26 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, NESNVX is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Asbury Automotive and NESNVX

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

The idea behind Asbury Automotive Group and NESNVX 525 13 MAR 26 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.