Correlation Between Aptiv PLC and INTER CARS
Can any of the company-specific risk be diversified away by investing in both Aptiv PLC and INTER CARS 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 INTER CARS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aptiv PLC and INTER CARS SA, you can compare the effects of market volatilities on Aptiv PLC and INTER CARS 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 INTER CARS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aptiv PLC and INTER CARS.
Diversification Opportunities for Aptiv PLC and INTER CARS
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aptiv and INTER is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Aptiv PLC and INTER CARS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTER CARS SA 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 INTER CARS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTER CARS SA has no effect on the direction of Aptiv PLC i.e., Aptiv PLC and INTER CARS go up and down completely randomly.
Pair Corralation between Aptiv PLC and INTER CARS
Assuming the 90 days horizon Aptiv PLC is expected to under-perform the INTER CARS. In addition to that, Aptiv PLC is 2.38 times more volatile than INTER CARS SA. It trades about -0.19 of its total potential returns per unit of risk. INTER CARS SA is currently generating about -0.01 per unit of volatility. If you would invest 10,840 in INTER CARS SA on August 30, 2024 and sell it today you would lose (80.00) from holding INTER CARS SA or give up 0.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aptiv PLC vs. INTER CARS SA
Performance |
| Timeline |
| Aptiv PLC |
| INTER CARS SA |
Aptiv PLC and INTER CARS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aptiv PLC and INTER CARS
The main advantage of trading using opposite Aptiv PLC and INTER CARS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aptiv PLC position performs unexpectedly, INTER CARS 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 INTER CARS will offset losses from the drop in INTER CARS's long position.| Aptiv PLC vs. CosmoSteel Holdings Limited | Aptiv PLC vs. COSMOSTEEL HLDGS | Aptiv PLC vs. BE Semiconductor Industries | Aptiv PLC vs. Elmos Semiconductor SE |
| INTER CARS vs. PT Astra International | INTER CARS vs. Superior Plus Corp | INTER CARS vs. NMI Holdings | INTER CARS vs. SIVERS SEMICONDUCTORS AB |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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