Correlation Between Aptiv PLC and Lydall
Can any of the company-specific risk be diversified away by investing in both Aptiv PLC and Lydall 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 Aptiv PLC and Lydall into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aptiv PLC and Lydall Inc, you can compare the effects of market volatilities on Aptiv PLC and Lydall 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 Aptiv PLC with a short position of Lydall. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aptiv PLC and Lydall.
Diversification Opportunities for Aptiv PLC and Lydall
Pay attention - limited upside
The 3 months correlation between Aptiv and Lydall is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aptiv PLC and Lydall Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lydall Inc and Aptiv PLC 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 Aptiv PLC are associated (or correlated) with Lydall. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lydall Inc has no effect on the direction of Aptiv PLC i.e., Aptiv PLC and Lydall go up and down completely randomly.
Pair Corralation between Aptiv PLC and Lydall
If you would invest (100.00) in Lydall Inc on January 25, 2024 and sell it today you would earn a total of 100.00 from holding Lydall Inc or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Aptiv PLC vs. Lydall Inc
Performance |
| Timeline |
| Aptiv PLC |
| Lydall Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Aptiv PLC and Lydall Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aptiv PLC and Lydall
The main advantage of trading using opposite Aptiv PLC and Lydall positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aptiv PLC position performs unexpectedly, Lydall 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 Lydall will offset losses from the drop in Lydall's long position.The idea behind Aptiv PLC and Lydall Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Lydall vs. NI Holdings | Lydall vs. National Western Life | Lydall vs. Boston Beer | Lydall vs. Pekin Life Insurance |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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