Correlation Between Aston Martin and Toyota
Can any of the company-specific risk be diversified away by investing in both Aston Martin and Toyota 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 Aston Martin and Toyota into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aston Martin Lagonda and Toyota Motor, you can compare the effects of market volatilities on Aston Martin and Toyota 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 Aston Martin with a short position of Toyota. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aston Martin and Toyota.
Diversification Opportunities for Aston Martin and Toyota
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aston and Toyota is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Aston Martin Lagonda and Toyota Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Toyota Motor and Aston Martin 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 Aston Martin Lagonda are associated (or correlated) with Toyota. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Toyota Motor has no effect on the direction of Aston Martin i.e., Aston Martin and Toyota go up and down completely randomly.
Pair Corralation between Aston Martin and Toyota
Assuming the 90 days horizon Aston Martin Lagonda is expected to under-perform the Toyota. In addition to that, Aston Martin is 3.34 times more volatile than Toyota Motor. It trades about -0.01 of its total potential returns per unit of risk. Toyota Motor is currently generating about -0.03 per unit of volatility. If you would invest 23,813 in Toyota Motor on January 25, 2024 and sell it today you would lose (523.00) from holding Toyota Motor or give up 2.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aston Martin Lagonda vs. Toyota Motor
Performance |
| Timeline |
| Aston Martin Lagonda |
| Toyota Motor |
Aston Martin and Toyota Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aston Martin and Toyota
The main advantage of trading using opposite Aston Martin and Toyota positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aston Martin position performs unexpectedly, Toyota 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 Toyota will offset losses from the drop in Toyota's long position.| Aston Martin vs. Volkswagen AG 110 | Aston Martin vs. Mercedes Benz Group AG | Aston Martin vs. Volkswagen AG Pref | Aston Martin vs. Mercedes Benz Group AG |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |