Correlation Between Asbury Automotive and Integral

Can any of the company-specific risk be diversified away by investing in both Asbury Automotive and Integral 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 Integral 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 Integral Ad Science, you can compare the effects of market volatilities on Asbury Automotive and Integral 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 Integral. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asbury Automotive and Integral.

Diversification Opportunities for Asbury Automotive and Integral

0.31

Correlation Coefficient

Asbury Automotive  Integral

Weak diversification

The 3 months correlation between Asbury and Integral is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Asbury Automotive Group and Integral Ad Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integral Ad Science 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 Integral. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integral Ad Science has no effect on the direction of Asbury Automotive i.e., Asbury Automotive and Integral go up and down completely randomly.

Pair Corralation between Asbury Automotive and Integral

Considering the 90-day investment horizon Asbury Automotive Group is expected to generate 0.73 times more return on investment than Integral. However, Asbury Automotive Group is 1.37 times less risky than Integral. It trades about 0.16 of its potential returns per unit of risk. Integral Ad Science is currently generating about 0.02 per unit of risk. If you would invest  21,293  in Asbury Automotive Group on September 12, 2024 and sell it today you would earn a total of  4,381  from holding Asbury Automotive Group or generate 20.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Asbury Automotive Group  vs.  Integral Ad Science

Asbury Automotive

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Asbury Automotive Group are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent fundamental drivers, Asbury Automotive reported solid returns over the last few months and may actually be approaching a breakup point.

Integral Ad Science

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Integral Ad Science are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Integral is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Asbury Automotive and Integral

The main advantage of trading using opposite Asbury Automotive and Integral positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asbury Automotive position performs unexpectedly, Integral 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 Integral will offset losses from the drop in Integral's long position.

The idea behind Asbury Automotive Group and Integral Ad Science 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.