Correlation Between Adient PLC and Pinterest
Can any of the company-specific risk be diversified away by investing in both Adient PLC and Pinterest 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 Pinterest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adient PLC and Pinterest, you can compare the effects of market volatilities on Adient PLC and Pinterest 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 Pinterest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adient PLC and Pinterest.
Diversification Opportunities for Adient PLC and Pinterest
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Adient and Pinterest is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Adient PLC and Pinterest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinterest 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 Pinterest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinterest has no effect on the direction of Adient PLC i.e., Adient PLC and Pinterest go up and down completely randomly.
Pair Corralation between Adient PLC and Pinterest
Given the investment horizon of 90 days Adient PLC is expected to under-perform the Pinterest. But the stock apears to be less risky and, when comparing its historical volatility, Adient PLC is 1.17 times less risky than Pinterest. The stock trades about -0.07 of its potential returns per unit of risk. The Pinterest is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,860 in Pinterest on September 4, 2024 and sell it today you would earn a total of 183.00 from holding Pinterest or generate 6.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adient PLC vs. Pinterest
Performance |
| Timeline |
| Adient PLC |
Adient PLC and Pinterest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adient PLC and Pinterest
The main advantage of trading using opposite Adient PLC and Pinterest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adient PLC position performs unexpectedly, Pinterest 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 Pinterest will offset losses from the drop in Pinterest's long position.| Adient PLC vs. Ford Motor | Adient PLC vs. General Motors | Adient PLC vs. Goodyear Tire Rubber | Adient PLC vs. Li Auto |
| Pinterest vs. Twilio Inc | Pinterest vs. Meta Platforms | Pinterest vs. Alphabet Inc Class C | Pinterest vs. Alphabet Inc Class A |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |