Correlation Between Dno ASA and Aptiv PLC
Can any of the company-specific risk be diversified away by investing in both Dno ASA and Aptiv PLC 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 Dno ASA and Aptiv PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dno ASA and Aptiv PLC, you can compare the effects of market volatilities on Dno ASA and Aptiv PLC 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 Dno ASA with a short position of Aptiv PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dno ASA and Aptiv PLC.
Diversification Opportunities for Dno ASA and Aptiv PLC
Excellent diversification
The 3 months correlation between Dno and Aptiv is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Dno ASA and Aptiv PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptiv PLC and Dno ASA 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 Dno ASA are associated (or correlated) with Aptiv PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptiv PLC has no effect on the direction of Dno ASA i.e., Dno ASA and Aptiv PLC go up and down completely randomly.
Pair Corralation between Dno ASA and Aptiv PLC
Assuming the 90 days horizon Dno ASA is expected to generate 0.5 times more return on investment than Aptiv PLC. However, Dno ASA is 1.98 times less risky than Aptiv PLC. It trades about 0.06 of its potential returns per unit of risk. Aptiv PLC is currently generating about -0.18 per unit of risk. If you would invest 1,300 in Dno ASA on August 31, 2024 and sell it today you would earn a total of 32.00 from holding Dno ASA or generate 2.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dno ASA vs. Aptiv PLC
Performance |
| Timeline |
| Dno ASA |
| Aptiv PLC |
Dno ASA and Aptiv PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dno ASA and Aptiv PLC
The main advantage of trading using opposite Dno ASA and Aptiv PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dno ASA position performs unexpectedly, Aptiv PLC 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 Aptiv PLC will offset losses from the drop in Aptiv PLC's long position.| Dno ASA vs. Eastman Chemical | Dno ASA vs. Nordic Semiconductor ASA | Dno ASA vs. Magnachip Semiconductor | Dno ASA vs. Tower Semiconductor |
| Aptiv PLC vs. PT Astra International | Aptiv PLC vs. Magna International | Aptiv PLC vs. Fuyao Glass Industry | Aptiv PLC vs. Superior Plus Corp |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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