Correlation Between Stoneridge and Visteon Corp
Can any of the company-specific risk be diversified away by investing in both Stoneridge and Visteon Corp 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 Stoneridge and Visteon Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stoneridge and Visteon Corp, you can compare the effects of market volatilities on Stoneridge and Visteon Corp 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 Stoneridge with a short position of Visteon Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stoneridge and Visteon Corp.
Diversification Opportunities for Stoneridge and Visteon Corp
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Stoneridge and Visteon is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Stoneridge and Visteon Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visteon Corp and Stoneridge 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 Stoneridge are associated (or correlated) with Visteon Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Visteon Corp has no effect on the direction of Stoneridge i.e., Stoneridge and Visteon Corp go up and down completely randomly.
Pair Corralation between Stoneridge and Visteon Corp
Considering the 90-day investment horizon Stoneridge is expected to under-perform the Visteon Corp. In addition to that, Stoneridge is 2.13 times more volatile than Visteon Corp. It trades about -0.1 of its total potential returns per unit of risk. Visteon Corp is currently generating about -0.04 per unit of volatility. If you would invest 9,119 in Visteon Corp on November 1, 2024 and sell it today you would lose (445.00) from holding Visteon Corp or give up 4.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stoneridge vs. Visteon Corp
Performance |
| Timeline |
| Stoneridge |
| Visteon Corp |
Stoneridge and Visteon Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stoneridge and Visteon Corp
The main advantage of trading using opposite Stoneridge and Visteon Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stoneridge position performs unexpectedly, Visteon Corp 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 Visteon Corp will offset losses from the drop in Visteon Corp's long position.| Stoneridge vs. Monro Muffler Brake | Stoneridge vs. Motorcar Parts of | Stoneridge vs. Standard Motor Products | Stoneridge vs. Douglas Dynamics |
| Visteon Corp vs. Gentex | Visteon Corp vs. Adient PLC | Visteon Corp vs. Autoliv | Visteon Corp vs. Fox Factory Holding |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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