Correlation Between Aptiv PLC and Dno ASA
Can any of the company-specific risk be diversified away by investing in both Aptiv PLC and Dno ASA 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 Dno ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aptiv PLC and Dno ASA, you can compare the effects of market volatilities on Aptiv PLC and Dno ASA 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 Dno ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aptiv PLC and Dno ASA.
Diversification Opportunities for Aptiv PLC and Dno ASA
Excellent diversification
The 3 months correlation between Aptiv and Dno is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Aptiv PLC and Dno ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dno ASA 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 Dno ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dno ASA has no effect on the direction of Aptiv PLC i.e., Aptiv PLC and Dno ASA go up and down completely randomly.
Pair Corralation between Aptiv PLC and Dno ASA
Assuming the 90 days horizon Aptiv PLC is expected to generate 0.38 times more return on investment than Dno ASA. However, Aptiv PLC is 2.63 times less risky than Dno ASA. It trades about 0.13 of its potential returns per unit of risk. Dno ASA is currently generating about 0.01 per unit of risk. If you would invest 5,396 in Aptiv PLC on October 11, 2024 and sell it today you would earn a total of 91.00 from holding Aptiv PLC or generate 1.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Aptiv PLC vs. Dno ASA
Performance |
| Timeline |
| Aptiv PLC |
| Dno ASA |
Aptiv PLC and Dno ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aptiv PLC and Dno ASA
The main advantage of trading using opposite Aptiv PLC and Dno ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aptiv PLC position performs unexpectedly, Dno ASA 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 Dno ASA will offset losses from the drop in Dno ASA's long position.| Aptiv PLC vs. PT Astra International | Aptiv PLC vs. Superior Plus Corp | Aptiv PLC vs. NMI Holdings | Aptiv PLC vs. SIVERS SEMICONDUCTORS AB |
| Dno ASA vs. PT Astra International | Dno ASA vs. Superior Plus Corp | Dno ASA vs. NMI Holdings | Dno ASA 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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