Correlation Between Aptiv PLC and Volcon

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Can any of the company-specific risk be diversified away by investing in both Aptiv PLC and Volcon 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 Volcon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aptiv PLC and Volcon Inc, you can compare the effects of market volatilities on Aptiv PLC and Volcon 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 Volcon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aptiv PLC and Volcon.

Diversification Opportunities for Aptiv PLC and Volcon

AptivVolconDiversified AwayAptivVolconDiversified Away100%
-0.8
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Aptiv and Volcon is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Aptiv PLC and Volcon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volcon 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 Volcon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volcon Inc has no effect on the direction of Aptiv PLC i.e., Aptiv PLC and Volcon go up and down completely randomly.

Pair Corralation between Aptiv PLC and Volcon

Given the investment horizon of 90 days Aptiv PLC is expected to generate 0.14 times more return on investment than Volcon. However, Aptiv PLC is 7.21 times less risky than Volcon. It trades about 0.14 of its potential returns per unit of risk. Volcon Inc is currently generating about -0.57 per unit of risk. If you would invest  6,417  in Aptiv PLC on November 27, 2024 and sell it today you would earn a total of  248.00  from holding Aptiv PLC or generate 3.86% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Aptiv PLC  vs.  Volcon Inc

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -80-60-40-2002040
JavaScript chart by amCharts 3.21.15APTV VLCN
       Timeline  
Aptiv PLC 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Aptiv PLC are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Aptiv PLC showed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb5456586062646668
Volcon Inc 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Volcon Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb11.522.533.544.55

Aptiv PLC and Volcon Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.23-3.17-2.11-1.060.01.192.393.64.8 0.050.100.150.20
JavaScript chart by amCharts 3.21.15APTV VLCN
       Returns  

Pair Trading with Aptiv PLC and Volcon

The main advantage of trading using opposite Aptiv PLC and Volcon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aptiv PLC position performs unexpectedly, Volcon 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 Volcon will offset losses from the drop in Volcon's long position.
The idea behind Aptiv PLC and Volcon Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.

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