Advance Auto Correlations

AAP Stock

USD 41.35 3.09 6.95%

The current 90-days correlation between Advance Auto Parts and AutoZone is 0.42 (i.e., Very weak diversification). The correlation of Advance Auto is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak. If the correlation is 0, the equities are not correlated; they are entirely random.

Advance Auto Correlation With Market

Modest diversification

The correlation between Advance Auto Parts and DJI is 0.29 (i.e., Modest diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Advance Auto Parts and DJI in the same portfolio, assuming nothing else is changed.

Check out Trending Equities to better understand how to build diversified portfolios, which includes a position in Advance Auto Parts. Also, note that the market value of any company could be closely tied with the direction of predictive economic indicators such as signals in nation.

Moving together with Advance Stock

0.74

DKS

Dicks Sporting Goods

Pair Corr

Moving against Advance Stock

0.4	WOOF	Pet Acquisition LLC	Pair Corr
0.37	AGS	PlayAGS	Pair Corr
0.48	WEN	The Wendys	Pair Corr
0.44	XPEV	Xpeng Inc	Pair Corr
0.43	YUMC	Yum China Holdings	Pair Corr

Related Correlations Analysis

	AZO	TSCO	GPC	FIVE	ORLY	DKS	ULTA	WSM	RH
AZO		0.29	0.22	-0.41	0.4	0.31	-0.12	-0.11	-0.1	AZO
TSCO	0.29		0.36	0.33	0.3	-0.02	0.01	0.28	0.41	TSCO
GPC	0.22	0.36		0.03	-0.46	0.69	0.2	0.15	-0.2	GPC
FIVE	-0.41	0.33	0.03		-0.07	-0.2	0.53	0.31	0.6	FIVE
ORLY	0.4	0.3	-0.46	-0.07		-0.38	-0.3	0.21	0.57	ORLY
DKS	0.31	-0.02	0.69	-0.2	-0.38		0.02	0.11	-0.25	DKS
ULTA	-0.12	0.01	0.2	0.53	-0.3	0.02		-0.1	0.18	ULTA
WSM	-0.11	0.28	0.15	0.31	0.21	0.11	-0.1		0.67	WSM
RH	-0.1	0.41	-0.2	0.6	0.57	-0.25	0.18	0.67		RH
	AZO	TSCO	GPC	FIVE	ORLY	DKS	ULTA	WSM	RH

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Correlation Matchups

Over a given time period, the two securities move together when the Correlation Coefficient is positive. Conversely, the two assets move in opposite directions when the Correlation Coefficient is negative. Determining your positions' relationship to each other is valuable for analyzing and projecting your portfolio's future expected return and risk.

High positive correlations

DKS	+ 0.69	GPC
RH	+ 0.67	WSM
RH	+ 0.6	FIVE
RH	+ 0.57	ORLY
ULTA	+ 0.53	FIVE
RH	+ 0.41	TSCO

High negative correlations

ORLY	- 0.46	GPC
FIVE	- 0.41	AZO
DKS	- 0.38	ORLY
ULTA	- 0.3	ORLY
RH	- 0.25	DKS
DKS	- 0.2	FIVE

Risk-Adjusted Indicators

There is a big difference between Advance Stock performing well and Advance Auto Company doing well as a business compared to the competition. There are so many exceptions to the norm that investors cannot definitively determine what's good or bad unless they analyze Advance Auto's multiple risk-adjusted performance indicators across the competitive landscape. These indicators are quantitative in nature and help investors forecast volatility and risk-adjusted expected returns across various positions.

	Mean Deviation	Jensen Alpha	Sortino Ratio	Treynor Ratio	Semi Deviation	Expected Shortfall	Potential Upside	Value @Risk	Maximum Drawdown
AZO	1.06	(0.10)	0.00	(0.02)	0.00	0.00	2.14	(1.68)	6.36
TSCO	1.14	(0.05)	(0.04)	0.07	1.57	(1.18)	2.16	(2.25)	9.44
GPC	1.41	(0.28)	0.00	(0.11)	0.00	0.00	2.85	(2.36)	23.82
FIVE	2.55	0.35	0.05	(0.54)	2.79	(2.92)	5.40	(3.80)	16.58
ORLY	0.82	0.02	0.00	0.15	0.85	(0.86)	1.40	(1.55)	7.77
DKS	1.49	(0.27)	0.00	(0.24)	0.00	0.00	2.97	(3.16)	7.73
ULTA	1.49	0.01	(0.02)	0.15	1.77	(1.59)	3.24	(3.24)	8.40
WSM	2.01	0.41	0.15	2.47	1.72	(2.41)	3.41	(3.07)	29.71
RH	2.17	0.49	0.26	0.63	1.51	(2.80)	4.95	(2.84)	29.32

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