Correlation Between Mingteng International and Aptiv PLC

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

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

Diversification Opportunities for Mingteng International and Aptiv PLC

-0.4

Correlation Coefficient

Mingteng International  Aptiv PLC

Very good diversification

The 3 months correlation between Mingteng and Aptiv is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Mingteng International and Aptiv PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptiv PLC and Mingteng International 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 Mingteng International 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 Mingteng International i.e., Mingteng International and Aptiv PLC go up and down completely randomly.

Pair Corralation between Mingteng International and Aptiv PLC

Given the investment horizon of 90 days Mingteng International is expected to generate 4.7 times more return on investment than Aptiv PLC. However, Mingteng International is 4.7 times more volatile than Aptiv PLC. It trades about 0.02 of its potential returns per unit of risk. Aptiv PLC is currently generating about 0.04 per unit of risk. If you would invest  625.00  in Mingteng International on December 29, 2024 and sell it today you would lose (56.00) from holding Mingteng International or give up 8.96% of portfolio value over 90 days.

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

Mingteng International  vs.  Aptiv PLC

Mingteng International

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mingteng International are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Mingteng International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Aptiv PLC

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aptiv PLC are ranked lower than 3 (%) 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.

Pair Trading with Mingteng International and Aptiv PLC

The main advantage of trading using opposite Mingteng International and Aptiv PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mingteng International 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 Mingteng International 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 Stocks Directory module to find actively traded stocks across global markets.