Correlation Between COLGATE and Adient PLC
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By analyzing existing cross correlation between COLGATE PALMOLIVE MEDIUM TERM and Adient PLC, you can compare the effects of market volatilities on COLGATE and Adient 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 COLGATE with a short position of Adient PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of COLGATE and Adient PLC.
Diversification Opportunities for COLGATE and Adient PLC
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between COLGATE and Adient is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding COLGATE PALMOLIVE MEDIUM TERM and Adient PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adient PLC and COLGATE 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 COLGATE PALMOLIVE MEDIUM TERM are associated (or correlated) with Adient PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adient PLC has no effect on the direction of COLGATE i.e., COLGATE and Adient PLC go up and down completely randomly.
Pair Corralation between COLGATE and Adient PLC
Assuming the 90 days trading horizon COLGATE is expected to generate 1.64 times less return on investment than Adient PLC. But when comparing it to its historical volatility, COLGATE PALMOLIVE MEDIUM TERM is 2.79 times less risky than Adient PLC. It trades about 0.11 of its potential returns per unit of risk. Adient PLC is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,974 in Adient PLC on September 4, 2024 and sell it today you would earn a total of 55.00 from holding Adient PLC or generate 2.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 61.9% |
| Values | Daily Returns |
COLGATE PALMOLIVE MEDIUM TERM vs. Adient PLC
Performance |
| Timeline |
| COLGATE PALMOLIVE |
| Adient PLC |
COLGATE and Adient PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COLGATE and Adient PLC
The main advantage of trading using opposite COLGATE and Adient PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COLGATE position performs unexpectedly, Adient 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 Adient PLC will offset losses from the drop in Adient PLC's long position.| COLGATE vs. The Travelers Companies | COLGATE vs. GE Aerospace | COLGATE vs. Walmart | COLGATE vs. Pfizer Inc |
| Adient PLC vs. Ford Motor | Adient PLC vs. General Motors | Adient PLC vs. Goodyear Tire Rubber | Adient PLC vs. Li Auto |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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