Correlation Between Aston Martin and NFI
Can any of the company-specific risk be diversified away by investing in both Aston Martin and NFI 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 Aston Martin and NFI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aston Martin Lagonda and NFI Group, you can compare the effects of market volatilities on Aston Martin and NFI 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 Aston Martin with a short position of NFI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aston Martin and NFI.
Diversification Opportunities for Aston Martin and NFI
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aston and NFI is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Aston Martin Lagonda and NFI Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NFI Group and Aston Martin 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 Aston Martin Lagonda are associated (or correlated) with NFI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NFI Group has no effect on the direction of Aston Martin i.e., Aston Martin and NFI go up and down completely randomly.
Pair Corralation between Aston Martin and NFI
Assuming the 90 days horizon Aston Martin Lagonda is expected to under-perform the NFI. In addition to that, Aston Martin is 1.36 times more volatile than NFI Group. It trades about -0.06 of its total potential returns per unit of risk. NFI Group is currently generating about 0.04 per unit of volatility. If you would invest 907.00 in NFI Group on August 28, 2024 and sell it today you would earn a total of 153.00 from holding NFI Group or generate 16.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aston Martin Lagonda vs. NFI Group
Performance |
| Timeline |
| Aston Martin Lagonda |
| NFI Group |
Aston Martin and NFI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aston Martin and NFI
The main advantage of trading using opposite Aston Martin and NFI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aston Martin position performs unexpectedly, NFI 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 NFI will offset losses from the drop in NFI's long position.| Aston Martin vs. Geely Automobile Holdings | Aston Martin vs. Guangzhou Automobile Group | Aston Martin vs. Dowlais Group plc | Aston Martin vs. NFI Group |
| NFI vs. Zapp Electric Vehicles | NFI vs. Guangzhou Automobile Group | NFI vs. Exor NV | NFI vs. Aston Martin Lagonda |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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