Correlation Between Adient PLC and Commercial Vehicle
Can any of the company-specific risk be diversified away by investing in both Adient PLC and Commercial Vehicle 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 Adient PLC and Commercial Vehicle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adient PLC and Commercial Vehicle Group, you can compare the effects of market volatilities on Adient PLC and Commercial Vehicle 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 Adient PLC with a short position of Commercial Vehicle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adient PLC and Commercial Vehicle.
Diversification Opportunities for Adient PLC and Commercial Vehicle
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Adient and Commercial is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Adient PLC and Commercial Vehicle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commercial Vehicle and Adient PLC 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 Adient PLC are associated (or correlated) with Commercial Vehicle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commercial Vehicle has no effect on the direction of Adient PLC i.e., Adient PLC and Commercial Vehicle go up and down completely randomly.
Pair Corralation between Adient PLC and Commercial Vehicle
Given the investment horizon of 90 days Adient PLC is expected to generate 0.68 times more return on investment than Commercial Vehicle. However, Adient PLC is 1.46 times less risky than Commercial Vehicle. It trades about -0.05 of its potential returns per unit of risk. Commercial Vehicle Group is currently generating about -0.05 per unit of risk. If you would invest 3,681 in Adient PLC on August 24, 2024 and sell it today you would lose (1,772) from holding Adient PLC or give up 48.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adient PLC vs. Commercial Vehicle Group
Performance |
| Timeline |
| Adient PLC |
| Commercial Vehicle |
Adient PLC and Commercial Vehicle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adient PLC and Commercial Vehicle
The main advantage of trading using opposite Adient PLC and Commercial Vehicle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adient PLC position performs unexpectedly, Commercial Vehicle 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 Commercial Vehicle will offset losses from the drop in Commercial Vehicle's long position.| Adient PLC vs. Gentex | Adient PLC vs. Autoliv | Adient PLC vs. Fox Factory Holding | Adient PLC vs. Dana Inc |
| Commercial Vehicle vs. Motorcar Parts of | Commercial Vehicle vs. Monro Muffler Brake | Commercial Vehicle vs. Stoneridge | Commercial Vehicle vs. Superior Industries International |
Check out your portfolio center.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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |