Correlation Between Aptiv PLC and NL Industries
Can any of the company-specific risk be diversified away by investing in both Aptiv PLC and NL Industries 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 NL Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aptiv PLC and NL Industries, you can compare the effects of market volatilities on Aptiv PLC and NL Industries 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 NL Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aptiv PLC and NL Industries.
Diversification Opportunities for Aptiv PLC and NL Industries
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aptiv and NL Industries is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Aptiv PLC and NL Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NL Industries 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 NL Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NL Industries has no effect on the direction of Aptiv PLC i.e., Aptiv PLC and NL Industries go up and down completely randomly.
Pair Corralation between Aptiv PLC and NL Industries
Given the investment horizon of 90 days Aptiv PLC is expected to generate 0.38 times more return on investment than NL Industries. However, Aptiv PLC is 2.63 times less risky than NL Industries. It trades about 0.12 of its potential returns per unit of risk. NL Industries is currently generating about 0.01 per unit of risk. If you would invest 6,053 in Aptiv PLC on November 4, 2024 and sell it today you would earn a total of 189.00 from holding Aptiv PLC or generate 3.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aptiv PLC vs. NL Industries
Performance |
| Timeline |
| Aptiv PLC |
| NL Industries |
Aptiv PLC and NL Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aptiv PLC and NL Industries
The main advantage of trading using opposite Aptiv PLC and NL Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aptiv PLC position performs unexpectedly, NL Industries 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 NL Industries will offset losses from the drop in NL Industries' long position.| Aptiv PLC vs. Allison Transmission Holdings | Aptiv PLC vs. LKQ Corporation | Aptiv PLC vs. Lear Corporation | Aptiv PLC vs. Magna International |
| NL Industries vs. Brinks Company | NL Industries vs. Allegion PLC | NL Industries vs. Resideo Technologies | NL Industries vs. Mistras Group |
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
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |