Correlation Between Aptiv PLC and PHINIA
Can any of the company-specific risk be diversified away by investing in both Aptiv PLC and PHINIA 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 PHINIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aptiv PLC and PHINIA Inc, you can compare the effects of market volatilities on Aptiv PLC and PHINIA 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 PHINIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aptiv PLC and PHINIA.
Diversification Opportunities for Aptiv PLC and PHINIA
Pay attention - limited upside
The 3 months correlation between Aptiv and PHINIA is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Aptiv PLC and PHINIA Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHINIA Inc 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 PHINIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHINIA Inc has no effect on the direction of Aptiv PLC i.e., Aptiv PLC and PHINIA go up and down completely randomly.
Pair Corralation between Aptiv PLC and PHINIA
Given the investment horizon of 90 days Aptiv PLC is expected to under-perform the PHINIA. In addition to that, Aptiv PLC is 1.05 times more volatile than PHINIA Inc. It trades about -0.06 of its total potential returns per unit of risk. PHINIA Inc is currently generating about 0.1 per unit of volatility. If you would invest 2,547 in PHINIA Inc on September 12, 2024 and sell it today you would earn a total of 2,822 from holding PHINIA Inc or generate 110.8% 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. PHINIA Inc
Performance |
| Timeline |
| Aptiv PLC |
| PHINIA Inc |
Aptiv PLC and PHINIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aptiv PLC and PHINIA
The main advantage of trading using opposite Aptiv PLC and PHINIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aptiv PLC position performs unexpectedly, PHINIA 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 PHINIA will offset losses from the drop in PHINIA's long position.| Aptiv PLC vs. Cooper Stnd | Aptiv PLC vs. Motorcar Parts of | Aptiv PLC vs. American Axle Manufacturing | Aptiv PLC vs. Stoneridge |
| PHINIA vs. Acco Brands | PHINIA vs. Triton International Limited | PHINIA vs. Coursera | PHINIA vs. United Rentals |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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