Correlation Between Bridgestone Corp and Aeva Technologies
Can any of the company-specific risk be diversified away by investing in both Bridgestone Corp and Aeva Technologies 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 Bridgestone Corp and Aeva Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bridgestone Corp ADR and Aeva Technologies, you can compare the effects of market volatilities on Bridgestone Corp and Aeva Technologies 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 Bridgestone Corp with a short position of Aeva Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridgestone Corp and Aeva Technologies.
Diversification Opportunities for Bridgestone Corp and Aeva Technologies
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bridgestone and Aeva is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Bridgestone Corp ADR and Aeva Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeva Technologies and Bridgestone Corp 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 Bridgestone Corp ADR are associated (or correlated) with Aeva Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeva Technologies has no effect on the direction of Bridgestone Corp i.e., Bridgestone Corp and Aeva Technologies go up and down completely randomly.
Pair Corralation between Bridgestone Corp and Aeva Technologies
Assuming the 90 days horizon Bridgestone Corp is expected to generate 10.52 times less return on investment than Aeva Technologies. But when comparing it to its historical volatility, Bridgestone Corp ADR is 4.81 times less risky than Aeva Technologies. It trades about 0.01 of its potential returns per unit of risk. Aeva Technologies is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 765.00 in Aeva Technologies on August 30, 2024 and sell it today you would lose (290.00) from holding Aeva Technologies or give up 37.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bridgestone Corp ADR vs. Aeva Technologies
Performance |
| Timeline |
| Bridgestone Corp ADR |
| Aeva Technologies |
Bridgestone Corp and Aeva Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bridgestone Corp and Aeva Technologies
The main advantage of trading using opposite Bridgestone Corp and Aeva Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridgestone Corp position performs unexpectedly, Aeva Technologies 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 Aeva Technologies will offset losses from the drop in Aeva Technologies' long position.| Bridgestone Corp vs. Continental AG PK | Bridgestone Corp vs. Compagnie Generale des | Bridgestone Corp vs. Denso Corp ADR | Bridgestone Corp vs. Subaru Corp ADR |
| Aeva Technologies vs. Innoviz Technologies | Aeva Technologies vs. Hesai Group American | Aeva Technologies vs. Luminar Technologies | Aeva Technologies vs. Aeye Inc |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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