Correlation Between Aptiv PLC and Dividend

Can any of the company-specific risk be diversified away by investing in both Aptiv PLC and Dividend 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 Dividend into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aptiv PLC and Dividend 15 Split, you can compare the effects of market volatilities on Aptiv PLC and Dividend 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 Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aptiv PLC and Dividend.

Diversification Opportunities for Aptiv PLC and Dividend

0.69

Correlation Coefficient

Aptiv PLC  Dividend

Poor diversification

The 3 months correlation between Aptiv and Dividend is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Aptiv PLC and Dividend 15 Split in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dividend 15 Split 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 Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dividend 15 Split has no effect on the direction of Aptiv PLC i.e., Aptiv PLC and Dividend go up and down completely randomly.

Pair Corralation between Aptiv PLC and Dividend

Given the investment horizon of 90 days Aptiv PLC is expected to generate 2.03 times less return on investment than Dividend. But when comparing it to its historical volatility, Aptiv PLC is 1.79 times less risky than Dividend. It trades about 0.06 of its potential returns per unit of risk. Dividend 15 Split is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  338.00  in Dividend 15 Split on December 21, 2024 and sell it today you would earn a total of  36.00  from holding Dividend 15 Split or generate 10.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	93.75%
Values	Daily Returns

Aptiv PLC  vs.  Dividend 15 Split

Aptiv PLC

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aptiv PLC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Aptiv PLC is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Dividend 15 Split

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Dividend 15 Split are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady fundamental indicators, Dividend may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Aptiv PLC and Dividend

The main advantage of trading using opposite Aptiv PLC and Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aptiv PLC position performs unexpectedly, Dividend 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 Dividend will offset losses from the drop in Dividend's long position.

The idea behind Aptiv PLC and Dividend 15 Split 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.

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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..