Correlation Between Cooper Stnd and Autoliv
Can any of the company-specific risk be diversified away by investing in both Cooper Stnd and Autoliv 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 Cooper Stnd and Autoliv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cooper Stnd and Autoliv, you can compare the effects of market volatilities on Cooper Stnd and Autoliv 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 Cooper Stnd with a short position of Autoliv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cooper Stnd and Autoliv.
Diversification Opportunities for Cooper Stnd and Autoliv
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cooper and Autoliv is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Cooper Stnd and Autoliv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autoliv and Cooper Stnd 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 Cooper Stnd are associated (or correlated) with Autoliv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autoliv has no effect on the direction of Cooper Stnd i.e., Cooper Stnd and Autoliv go up and down completely randomly.
Pair Corralation between Cooper Stnd and Autoliv
Considering the 90-day investment horizon Cooper Stnd is expected to generate 2.75 times more return on investment than Autoliv. However, Cooper Stnd is 2.75 times more volatile than Autoliv. It trades about 0.06 of its potential returns per unit of risk. Autoliv is currently generating about 0.03 per unit of risk. If you would invest 649.00 in Cooper Stnd on August 24, 2024 and sell it today you would earn a total of 759.00 from holding Cooper Stnd or generate 116.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cooper Stnd vs. Autoliv
Performance |
| Timeline |
| Cooper Stnd |
| Autoliv |
Cooper Stnd and Autoliv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cooper Stnd and Autoliv
The main advantage of trading using opposite Cooper Stnd and Autoliv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cooper Stnd position performs unexpectedly, Autoliv 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 Autoliv will offset losses from the drop in Autoliv's long position.| Cooper Stnd vs. Dorman Products | Cooper Stnd vs. Monro Muffler Brake | Cooper Stnd vs. Standard Motor Products | Cooper Stnd vs. Stoneridge |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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