Correlation Between 50249AAK9 and Visteon Corp

Can any of the company-specific risk be diversified away by investing in both 50249AAK9 and Visteon Corp 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 50249AAK9 and Visteon Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between LYB 38 01 OCT 60 and Visteon Corp, you can compare the effects of market volatilities on 50249AAK9 and Visteon Corp 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 50249AAK9 with a short position of Visteon Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of 50249AAK9 and Visteon Corp.

Diversification Opportunities for 50249AAK9 and Visteon Corp

0.07

Correlation Coefficient

50249AAK9  Visteon Corp

Significant diversification

The 3 months correlation between 50249AAK9 and Visteon is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding LYB 38 01 OCT 60 and Visteon Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visteon Corp and 50249AAK9 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 LYB 38 01 OCT 60 are associated (or correlated) with Visteon Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Visteon Corp has no effect on the direction of 50249AAK9 i.e., 50249AAK9 and Visteon Corp go up and down completely randomly.

Pair Corralation between 50249AAK9 and Visteon Corp

Assuming the 90 days trading horizon LYB 38 01 OCT 60 is expected to generate 0.68 times more return on investment than Visteon Corp. However, LYB 38 01 OCT 60 is 1.47 times less risky than Visteon Corp. It trades about 0.03 of its potential returns per unit of risk. Visteon Corp is currently generating about -0.07 per unit of risk. If you would invest  6,644  in LYB 38 01 OCT 60 on September 24, 2024 and sell it today you would earn a total of  189.00  from holding LYB 38 01 OCT 60 or generate 2.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	56.63%
Values	Daily Returns

LYB 38 01 OCT 60  vs.  Visteon Corp

LYB 38 01

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LYB 38 01 OCT 60 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for LYB 38 01 OCT 60 investors.

Visteon Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Visteon Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with 50249AAK9 and Visteon Corp

The main advantage of trading using opposite 50249AAK9 and Visteon Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 50249AAK9 position performs unexpectedly, Visteon Corp 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 Visteon Corp will offset losses from the drop in Visteon Corp's long position.

The idea behind LYB 38 01 OCT 60 and Visteon Corp 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.