Correlation Between Aston Martin and Stellantis
Can any of the company-specific risk be diversified away by investing in both Aston Martin and Stellantis 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 Aston Martin and Stellantis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aston Martin Lagonda and Stellantis NV, you can compare the effects of market volatilities on Aston Martin and Stellantis 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 Aston Martin with a short position of Stellantis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aston Martin and Stellantis.
Diversification Opportunities for Aston Martin and Stellantis
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aston and Stellantis is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Aston Martin Lagonda and Stellantis NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stellantis NV and Aston Martin 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 Aston Martin Lagonda are associated (or correlated) with Stellantis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stellantis NV has no effect on the direction of Aston Martin i.e., Aston Martin and Stellantis go up and down completely randomly.
Pair Corralation between Aston Martin and Stellantis
Assuming the 90 days horizon Aston Martin Lagonda is expected to generate 2.53 times more return on investment than Stellantis. However, Aston Martin is 2.53 times more volatile than Stellantis NV. It trades about -0.03 of its potential returns per unit of risk. Stellantis NV is currently generating about -0.08 per unit of risk. If you would invest 285.00 in Aston Martin Lagonda on September 2, 2024 and sell it today you would lose (142.00) from holding Aston Martin Lagonda or give up 49.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aston Martin Lagonda vs. Stellantis NV
Performance |
| Timeline |
| Aston Martin Lagonda |
| Stellantis NV |
Aston Martin and Stellantis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aston Martin and Stellantis
The main advantage of trading using opposite Aston Martin and Stellantis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aston Martin position performs unexpectedly, Stellantis 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 Stellantis will offset losses from the drop in Stellantis' long position.| Aston Martin vs. Polestar Automotive Holding | Aston Martin vs. Geely Automobile Holdings | Aston Martin vs. Mercedes Benz Group AG | Aston Martin vs. Porsche Automobile Holding |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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