Correlation Between Mink Therapeutics and Asbury Automotive

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

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

Diversification Opportunities for Mink Therapeutics and Asbury Automotive

-0.07

Correlation Coefficient

Mink Therapeutics  Asbury Automotive

Good diversification

The 3 months correlation between Mink and Asbury is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Mink Therapeutics and Asbury Automotive Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asbury Automotive and Mink Therapeutics 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 Mink Therapeutics 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 Mink Therapeutics i.e., Mink Therapeutics and Asbury Automotive go up and down completely randomly.

Pair Corralation between Mink Therapeutics and Asbury Automotive

Given the investment horizon of 90 days Mink Therapeutics is expected to generate 8.77 times more return on investment than Asbury Automotive. However, Mink Therapeutics is 8.77 times more volatile than Asbury Automotive Group. It trades about 0.29 of its potential returns per unit of risk. Asbury Automotive Group is currently generating about 0.02 per unit of risk. If you would invest  50.00  in Mink Therapeutics on October 20, 2024 and sell it today you would earn a total of  38.00  from holding Mink Therapeutics or generate 76.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Mink Therapeutics  vs.  Asbury Automotive Group

Mink Therapeutics

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mink Therapeutics are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady forward-looking signals, Mink Therapeutics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Asbury Automotive

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Asbury Automotive Group are ranked lower than 5 (%) 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 February 2025.

Pair Trading with Mink Therapeutics and Asbury Automotive

The main advantage of trading using opposite Mink Therapeutics and Asbury Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mink Therapeutics 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 Mink Therapeutics 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.