Correlation Between Subaru Corp and Stellantis

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

By analyzing existing cross correlation between Subaru Corp ADR and Stellantis NV, you can compare the effects of market volatilities on Subaru Corp and Stellantis 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 Subaru Corp with a short position of Stellantis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Subaru Corp and Stellantis.

Diversification Opportunities for Subaru Corp and Stellantis

0.17

Correlation Coefficient

Subaru Corp  Stellantis

Average diversification

The 3 months correlation between Subaru and Stellantis is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Subaru Corp ADR and Stellantis NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stellantis NV and Subaru Corp 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 Subaru Corp ADR are associated (or correlated) with Stellantis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stellantis NV has no effect on the direction of Subaru Corp i.e., Subaru Corp and Stellantis go up and down completely randomly.

Pair Corralation between Subaru Corp and Stellantis

Assuming the 90 days horizon Subaru Corp ADR is expected to generate 0.89 times more return on investment than Stellantis. However, Subaru Corp ADR is 1.12 times less risky than Stellantis. It trades about 0.03 of its potential returns per unit of risk. Stellantis NV is currently generating about 0.0 per unit of risk. If you would invest  738.00  in Subaru Corp ADR on October 3, 2024 and sell it today you would earn a total of  152.00  from holding Subaru Corp ADR or generate 20.6% return on investment over 90 days.

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

Subaru Corp ADR  vs.  Stellantis NV

Subaru Corp ADR

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Subaru Corp ADR are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical indicators, Subaru Corp is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Stellantis NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Stellantis NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong essential indicators, Stellantis is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Subaru Corp and Stellantis

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

The idea behind Subaru Corp ADR and Stellantis NV 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.