Correlation Between Cooper Stnd and Aptiv PLC

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

By analyzing existing cross correlation between Cooper Stnd and Aptiv PLC, you can compare the effects of market volatilities on Cooper Stnd and Aptiv PLC 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 Cooper Stnd with a short position of Aptiv PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cooper Stnd and Aptiv PLC.

Diversification Opportunities for Cooper Stnd and Aptiv PLC

-0.63

Correlation Coefficient

Cooper Stnd  Aptiv PLC

Excellent diversification

The 3 months correlation between Cooper and Aptiv is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Cooper Stnd and Aptiv PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptiv PLC and Cooper Stnd 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 Cooper Stnd are associated (or correlated) with Aptiv PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptiv PLC has no effect on the direction of Cooper Stnd i.e., Cooper Stnd and Aptiv PLC go up and down completely randomly.

Pair Corralation between Cooper Stnd and Aptiv PLC

Considering the 90-day investment horizon Cooper Stnd is expected to generate 1.65 times more return on investment than Aptiv PLC. However, Cooper Stnd is 1.65 times more volatile than Aptiv PLC. It trades about 0.0 of its potential returns per unit of risk. Aptiv PLC is currently generating about -0.04 per unit of risk. If you would invest  1,692  in Cooper Stnd on October 7, 2024 and sell it today you would lose (329.00) from holding Cooper Stnd or give up 19.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Cooper Stnd  vs.  Aptiv PLC

Cooper Stnd

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cooper Stnd are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Cooper Stnd may actually be approaching a critical reversion point that can send shares even higher in February 2025.

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 unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Cooper Stnd and Aptiv PLC

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

The idea behind Cooper Stnd and Aptiv PLC 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.