Correlation Between Aptiv PLC and Magna International
Can any of the company-specific risk be diversified away by investing in both Aptiv PLC and Magna International 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 Magna International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aptiv PLC and Magna International, you can compare the effects of market volatilities on Aptiv PLC and Magna International 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 Magna International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aptiv PLC and Magna International.
Diversification Opportunities for Aptiv PLC and Magna International
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aptiv and Magna is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Aptiv PLC and Magna International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magna International 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 Magna International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magna International has no effect on the direction of Aptiv PLC i.e., Aptiv PLC and Magna International go up and down completely randomly.
Pair Corralation between Aptiv PLC and Magna International
Assuming the 90 days horizon Aptiv PLC is expected to under-perform the Magna International. In addition to that, Aptiv PLC is 1.12 times more volatile than Magna International. It trades about -0.03 of its total potential returns per unit of risk. Magna International is currently generating about -0.01 per unit of volatility. If you would invest 4,859 in Magna International on September 23, 2024 and sell it today you would lose (809.00) from holding Magna International or give up 16.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Aptiv PLC vs. Magna International
Performance |
| Timeline |
| Aptiv PLC |
| Magna International |
Aptiv PLC and Magna International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aptiv PLC and Magna International
The main advantage of trading using opposite Aptiv PLC and Magna International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aptiv PLC position performs unexpectedly, Magna International 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 Magna International will offset losses from the drop in Magna International's long position.| Aptiv PLC vs. Dno ASA | Aptiv PLC vs. DENSO P ADR | Aptiv PLC vs. PT Astra International | Aptiv PLC vs. Magna International |
| Magna International vs. Dno ASA | Magna International vs. DENSO P ADR | Magna International vs. Aptiv PLC | Magna International vs. PT Astra International |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |