Correlation Between RYU Apparel and Asbury Automotive

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

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

Diversification Opportunities for RYU Apparel and Asbury Automotive

0.0

Correlation Coefficient

RYU Apparel  Asbury Automotive

Pay attention - limited upside

The 3 months correlation between RYU and Asbury is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding RYU Apparel and Asbury Automotive Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asbury Automotive and RYU Apparel 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 RYU Apparel 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 RYU Apparel i.e., RYU Apparel and Asbury Automotive go up and down completely randomly.

Pair Corralation between RYU Apparel and Asbury Automotive

If you would invest  1.20  in RYU Apparel on December 20, 2024 and sell it today you would earn a total of  0.00  from holding RYU Apparel or generate 0.0% return on investment over 90 days.

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

RYU Apparel  vs.  Asbury Automotive Group

RYU Apparel

Risk-Adjusted Performance

Very Weak

Over the last 90 days RYU Apparel has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, RYU Apparel is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Asbury Automotive

Risk-Adjusted Performance

Very Weak

Over the last 90 days Asbury Automotive Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with RYU Apparel and Asbury Automotive

The main advantage of trading using opposite RYU Apparel and Asbury Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RYU Apparel 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 RYU Apparel 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.