Correlation Between Aptiv PLC and NATIONAL

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

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

Diversification Opportunities for Aptiv PLC and NATIONAL

-0.59

Correlation Coefficient

Aptiv PLC  NATIONAL

Excellent diversification

The 3 months correlation between Aptiv and NATIONAL is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Aptiv PLC and NATIONAL RURAL UTILS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NATIONAL RURAL UTILS 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 NATIONAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NATIONAL RURAL UTILS has no effect on the direction of Aptiv PLC i.e., Aptiv PLC and NATIONAL go up and down completely randomly.

Pair Corralation between Aptiv PLC and NATIONAL

Given the investment horizon of 90 days Aptiv PLC is expected to under-perform the NATIONAL. In addition to that, Aptiv PLC is 1.17 times more volatile than NATIONAL RURAL UTILS. It trades about -0.04 of its total potential returns per unit of risk. NATIONAL RURAL UTILS is currently generating about 0.0 per unit of volatility. If you would invest  8,910  in NATIONAL RURAL UTILS on September 4, 2024 and sell it today you would lose (101.00) from holding NATIONAL RURAL UTILS or give up 1.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	20.81%
Values	Daily Returns

Aptiv PLC  vs.  NATIONAL RURAL UTILS

Aptiv PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aptiv PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

NATIONAL RURAL UTILS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NATIONAL RURAL UTILS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for NATIONAL RURAL UTILS investors.

Pair Trading with Aptiv PLC and NATIONAL

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

The idea behind Aptiv PLC and NATIONAL RURAL UTILS 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.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.