Correlation Between Aptiv PLC and Vishay Intertechnology
Can any of the company-specific risk be diversified away by investing in both Aptiv PLC and Vishay Intertechnology 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 Vishay Intertechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aptiv PLC and Vishay Intertechnology, you can compare the effects of market volatilities on Aptiv PLC and Vishay Intertechnology 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 Vishay Intertechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aptiv PLC and Vishay Intertechnology.
Diversification Opportunities for Aptiv PLC and Vishay Intertechnology
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aptiv and Vishay is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Aptiv PLC and Vishay Intertechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vishay Intertechnology 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 Vishay Intertechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vishay Intertechnology has no effect on the direction of Aptiv PLC i.e., Aptiv PLC and Vishay Intertechnology go up and down completely randomly.
Pair Corralation between Aptiv PLC and Vishay Intertechnology
Given the investment horizon of 90 days Aptiv PLC is expected to under-perform the Vishay Intertechnology. In addition to that, Aptiv PLC is 1.23 times more volatile than Vishay Intertechnology. It trades about -0.04 of its total potential returns per unit of risk. Vishay Intertechnology is currently generating about -0.04 per unit of volatility. If you would invest 2,538 in Vishay Intertechnology on September 19, 2024 and sell it today you would lose (764.00) from holding Vishay Intertechnology or give up 30.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aptiv PLC vs. Vishay Intertechnology
Performance |
| Timeline |
| Aptiv PLC |
| Vishay Intertechnology |
Aptiv PLC and Vishay Intertechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aptiv PLC and Vishay Intertechnology
The main advantage of trading using opposite Aptiv PLC and Vishay Intertechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aptiv PLC position performs unexpectedly, Vishay Intertechnology 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 Vishay Intertechnology will offset losses from the drop in Vishay Intertechnology's long position.| Aptiv PLC vs. Allison Transmission Holdings | Aptiv PLC vs. LKQ Corporation | Aptiv PLC vs. Lear Corporation | Aptiv PLC vs. Magna International |
| Vishay Intertechnology vs. IONQ Inc | Vishay Intertechnology vs. Quantum | Vishay Intertechnology vs. Super Micro Computer | Vishay Intertechnology vs. Red Cat Holdings |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |