Correlation Between Autoliv and Horizon Global
Can any of the company-specific risk be diversified away by investing in both Autoliv and Horizon Global 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 Autoliv and Horizon Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autoliv and Horizon Global Corp, you can compare the effects of market volatilities on Autoliv and Horizon Global 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 Autoliv with a short position of Horizon Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autoliv and Horizon Global.
Diversification Opportunities for Autoliv and Horizon Global
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Autoliv and Horizon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Autoliv and Horizon Global Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizon Global Corp and Autoliv 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 Autoliv are associated (or correlated) with Horizon Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizon Global Corp has no effect on the direction of Autoliv i.e., Autoliv and Horizon Global go up and down completely randomly.
Pair Corralation between Autoliv and Horizon Global
Considering the 90-day investment horizon Autoliv is expected to generate 6.39 times less return on investment than Horizon Global. But when comparing it to its historical volatility, Autoliv is 12.08 times less risky than Horizon Global. It trades about 0.06 of its potential returns per unit of risk. Horizon Global Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 325.00 in Horizon Global Corp on January 26, 2024 and sell it today you would lose (149.00) from holding Horizon Global Corp or give up 45.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 38.66% |
| Values | Daily Returns |
Autoliv vs. Horizon Global Corp
Performance |
| Timeline |
| Autoliv |
| Horizon Global Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Autoliv and Horizon Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autoliv and Horizon Global
The main advantage of trading using opposite Autoliv and Horizon Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autoliv position performs unexpectedly, Horizon Global 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 Horizon Global will offset losses from the drop in Horizon Global's long position.| Autoliv vs. Faraday Future Intelligent | Autoliv vs. Mullen Automotive | Autoliv vs. Xpeng Inc | Autoliv vs. Nio Class A |
| Horizon Global vs. Encore Wire | Horizon Global vs. United Airlines Holdings | Horizon Global vs. Verra Mobility Corp | Horizon Global vs. Lizhan Environmental |
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.
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