Correlation Between Dowlais Group and Aston Martin
Can any of the company-specific risk be diversified away by investing in both Dowlais Group and Aston Martin 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 Dowlais Group and Aston Martin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dowlais Group plc and Aston Martin Lagonda, you can compare the effects of market volatilities on Dowlais Group and Aston Martin 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 Dowlais Group with a short position of Aston Martin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dowlais Group and Aston Martin.
Diversification Opportunities for Dowlais Group and Aston Martin
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dowlais and Aston is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Dowlais Group plc and Aston Martin Lagonda in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aston Martin Lagonda and Dowlais Group 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 Dowlais Group plc are associated (or correlated) with Aston Martin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aston Martin Lagonda has no effect on the direction of Dowlais Group i.e., Dowlais Group and Aston Martin go up and down completely randomly.
Pair Corralation between Dowlais Group and Aston Martin
Assuming the 90 days horizon Dowlais Group plc is expected to generate 1.29 times more return on investment than Aston Martin. However, Dowlais Group is 1.29 times more volatile than Aston Martin Lagonda. It trades about -0.01 of its potential returns per unit of risk. Aston Martin Lagonda is currently generating about -0.01 per unit of risk. If you would invest 147.00 in Dowlais Group plc on November 2, 2024 and sell it today you would lose (61.00) from holding Dowlais Group plc or give up 41.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 86.84% |
| Values | Daily Returns |
Dowlais Group plc vs. Aston Martin Lagonda
Performance |
| Timeline |
| Dowlais Group plc |
| Aston Martin Lagonda |
Dowlais Group and Aston Martin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dowlais Group and Aston Martin
The main advantage of trading using opposite Dowlais Group and Aston Martin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dowlais Group position performs unexpectedly, Aston Martin 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 Aston Martin will offset losses from the drop in Aston Martin's long position.| Dowlais Group vs. Acumen Pharmaceuticals | Dowlais Group vs. Inhibrx | Dowlais Group vs. Lipocine | Dowlais Group vs. Tarsus Pharmaceuticals |
| Aston Martin vs. Geely Automobile Holdings | Aston Martin vs. Guangzhou Automobile Group | Aston Martin vs. Dowlais Group plc | Aston Martin vs. NFI Group |
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
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |