Correlation Between Asbury Automotive and Victorias Secret
Can any of the company-specific risk be diversified away by investing in both Asbury Automotive and Victorias Secret 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 Victorias Secret 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 Victorias Secret Co, you can compare the effects of market volatilities on Asbury Automotive and Victorias Secret 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 Victorias Secret. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asbury Automotive and Victorias Secret.
Diversification Opportunities for Asbury Automotive and Victorias Secret
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Asbury and Victorias is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Asbury Automotive Group and Victorias Secret Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victorias Secret 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 Victorias Secret. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victorias Secret has no effect on the direction of Asbury Automotive i.e., Asbury Automotive and Victorias Secret go up and down completely randomly.
Pair Corralation between Asbury Automotive and Victorias Secret
Considering the 90-day investment horizon Asbury Automotive Group is expected to generate 0.67 times more return on investment than Victorias Secret. However, Asbury Automotive Group is 1.5 times less risky than Victorias Secret. It trades about -0.02 of its potential returns per unit of risk. Victorias Secret Co is currently generating about -0.3 per unit of risk. If you would invest 24,577 in Asbury Automotive Group on December 20, 2024 and sell it today you would lose (1,121) from holding Asbury Automotive Group or give up 4.56% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Asbury Automotive Group vs. Victorias Secret Co
Performance |
Timeline |
Asbury Automotive |
Victorias Secret |
Asbury Automotive and Victorias Secret Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Asbury Automotive and Victorias Secret
The main advantage of trading using opposite Asbury Automotive and Victorias Secret positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asbury Automotive position performs unexpectedly, Victorias Secret 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 Victorias Secret will offset losses from the drop in Victorias Secret's long position.Asbury Automotive vs. Sonic Automotive | Asbury Automotive vs. Lithia Motors | Asbury Automotive vs. AutoNation | Asbury Automotive vs. Penske Automotive Group |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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