Correlation Between Lithium Americas and Aptiv PLC
Can any of the company-specific risk be diversified away by investing in both Lithium Americas 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 Lithium Americas and Aptiv PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lithium Americas Corp and Aptiv PLC, you can compare the effects of market volatilities on Lithium Americas 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 Lithium Americas with a short position of Aptiv PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lithium Americas and Aptiv PLC.
Diversification Opportunities for Lithium Americas and Aptiv PLC
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lithium and Aptiv is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Lithium Americas Corp and Aptiv PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptiv PLC and Lithium Americas 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 Lithium Americas Corp 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 Lithium Americas i.e., Lithium Americas and Aptiv PLC go up and down completely randomly.
Pair Corralation between Lithium Americas and Aptiv PLC
Considering the 90-day investment horizon Lithium Americas Corp is expected to under-perform the Aptiv PLC. In addition to that, Lithium Americas is 2.67 times more volatile than Aptiv PLC. It trades about -0.01 of its total potential returns per unit of risk. Aptiv PLC is currently generating about 0.13 per unit of volatility. If you would invest 6,030 in Aptiv PLC on November 3, 2024 and sell it today you would earn a total of 212.00 from holding Aptiv PLC or generate 3.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lithium Americas Corp vs. Aptiv PLC
Performance |
| Timeline |
| Lithium Americas Corp |
| Aptiv PLC |
Lithium Americas and Aptiv PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lithium Americas and Aptiv PLC
The main advantage of trading using opposite Lithium Americas and Aptiv PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lithium Americas 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.| Lithium Americas vs. Sigma Lithium Resources | Lithium Americas vs. Standard Lithium | Lithium Americas vs. Sayona Mining Limited | Lithium Americas vs. MP Materials Corp |
| Aptiv PLC vs. Allison Transmission Holdings | Aptiv PLC vs. LKQ Corporation | Aptiv PLC vs. Lear Corporation | Aptiv PLC vs. Magna 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |