Correlation Between Aptiv PLC and Cooper Stnd
Can any of the company-specific risk be diversified away by investing in both Aptiv PLC and Cooper Stnd 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 Aptiv PLC and Cooper Stnd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aptiv PLC and Cooper Stnd, you can compare the effects of market volatilities on Aptiv PLC and Cooper Stnd 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 Aptiv PLC with a short position of Cooper Stnd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aptiv PLC and Cooper Stnd.
Diversification Opportunities for Aptiv PLC and Cooper Stnd
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aptiv and Cooper is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Aptiv PLC and Cooper Stnd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cooper Stnd and Aptiv 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 Aptiv PLC are associated (or correlated) with Cooper Stnd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cooper Stnd has no effect on the direction of Aptiv PLC i.e., Aptiv PLC and Cooper Stnd go up and down completely randomly.
Pair Corralation between Aptiv PLC and Cooper Stnd
Given the investment horizon of 90 days Aptiv PLC is expected to generate 0.55 times more return on investment than Cooper Stnd. However, Aptiv PLC is 1.81 times less risky than Cooper Stnd. It trades about 0.12 of its potential returns per unit of risk. Cooper Stnd is currently generating about -0.09 per unit of risk. If you would invest 5,593 in Aptiv PLC on September 12, 2024 and sell it today you would earn a total of 249.00 from holding Aptiv PLC or generate 4.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aptiv PLC vs. Cooper Stnd
Performance |
| Timeline |
| Aptiv PLC |
| Cooper Stnd |
Aptiv PLC and Cooper Stnd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aptiv PLC and Cooper Stnd
The main advantage of trading using opposite Aptiv PLC and Cooper Stnd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aptiv PLC position performs unexpectedly, Cooper Stnd 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 Cooper Stnd will offset losses from the drop in Cooper Stnd's long position.| Aptiv PLC vs. Cooper Stnd | Aptiv PLC vs. Motorcar Parts of | Aptiv PLC vs. American Axle Manufacturing | Aptiv PLC vs. Stoneridge |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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