Correlation Between Stellantis and Mazda
Can any of the company-specific risk be diversified away by investing in both Stellantis and Mazda 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 Stellantis and Mazda into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stellantis NV and Mazda Motor, you can compare the effects of market volatilities on Stellantis and Mazda 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 Stellantis with a short position of Mazda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stellantis and Mazda.
Diversification Opportunities for Stellantis and Mazda
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stellantis and Mazda is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Stellantis NV and Mazda Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mazda Motor and Stellantis 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 Stellantis NV are associated (or correlated) with Mazda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mazda Motor has no effect on the direction of Stellantis i.e., Stellantis and Mazda go up and down completely randomly.
Pair Corralation between Stellantis and Mazda
Given the investment horizon of 90 days Stellantis NV is expected to under-perform the Mazda. But the stock apears to be less risky and, when comparing its historical volatility, Stellantis NV is 1.53 times less risky than Mazda. The stock trades about -0.08 of its potential returns per unit of risk. The Mazda Motor is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 708.00 in Mazda Motor on August 24, 2024 and sell it today you would lose (8.00) from holding Mazda Motor or give up 1.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stellantis NV vs. Mazda Motor
Performance |
| Timeline |
| Stellantis NV |
| Mazda Motor |
Stellantis and Mazda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stellantis and Mazda
The main advantage of trading using opposite Stellantis and Mazda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stellantis position performs unexpectedly, Mazda 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 Mazda will offset losses from the drop in Mazda's long position.| Stellantis vs. Porsche Automobile Holding | Stellantis vs. Toyota Motor | Stellantis vs. Honda Motor Co | Stellantis vs. General Motors |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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