Correlation Between Reitar Logtech and Asbury Automotive

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

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

Diversification Opportunities for Reitar Logtech and Asbury Automotive

-0.47

Correlation Coefficient

Reitar Logtech  Asbury Automotive

Very good diversification

The 3 months correlation between Reitar and Asbury is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Reitar Logtech Holdings and Asbury Automotive Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asbury Automotive and Reitar Logtech 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 Reitar Logtech Holdings 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 Reitar Logtech i.e., Reitar Logtech and Asbury Automotive go up and down completely randomly.

Pair Corralation between Reitar Logtech and Asbury Automotive

Given the investment horizon of 90 days Reitar Logtech Holdings is expected to generate 44.67 times more return on investment than Asbury Automotive. However, Reitar Logtech is 44.67 times more volatile than Asbury Automotive Group. It trades about 0.11 of its potential returns per unit of risk. Asbury Automotive Group is currently generating about 0.03 per unit of risk. If you would invest  0.00  in Reitar Logtech Holdings on October 4, 2024 and sell it today you would earn a total of  378.00  from holding Reitar Logtech Holdings or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	18.95%
Values	Daily Returns

Reitar Logtech Holdings  vs.  Asbury Automotive Group

Reitar Logtech Holdings

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Reitar Logtech Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Reitar Logtech reported solid returns over the last few months and may actually be approaching a breakup point.

Asbury Automotive

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Asbury Automotive Group are ranked lower than 3 (%) 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.

Pair Trading with Reitar Logtech and Asbury Automotive

The main advantage of trading using opposite Reitar Logtech and Asbury Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reitar Logtech 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 Reitar Logtech Holdings 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 Commodity Directory module to find actively traded commodities issued by global exchanges.