Correlation Between Adient PLC and Destination

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Adient PLC and Destination 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 Adient PLC and Destination into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adient PLC and Destination XL Group, you can compare the effects of market volatilities on Adient PLC and Destination 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 Adient PLC with a short position of Destination. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adient PLC and Destination.

Diversification Opportunities for Adient PLC and Destination

0.67
  Correlation Coefficient

Poor diversification

The 3 months correlation between Adient and Destination is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Adient PLC and Destination XL Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Destination XL Group and Adient 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 Adient PLC are associated (or correlated) with Destination. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Destination XL Group has no effect on the direction of Adient PLC i.e., Adient PLC and Destination go up and down completely randomly.

Pair Corralation between Adient PLC and Destination

Given the investment horizon of 90 days Adient PLC is expected to generate 0.87 times more return on investment than Destination. However, Adient PLC is 1.15 times less risky than Destination. It trades about -0.07 of its potential returns per unit of risk. Destination XL Group is currently generating about -0.28 per unit of risk. If you would invest  3,420  in Adient PLC on December 29, 2023 and sell it today you would lose (128.00) from holding Adient PLC or give up 3.74% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy95.65%
ValuesDaily Returns

Adient PLC  vs.  Destination XL Group

 Performance 
       Timeline  
Adient PLC 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Adient PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.
Destination XL Group 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Destination XL Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in April 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Adient PLC and Destination Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Adient PLC and Destination

The main advantage of trading using opposite Adient PLC and Destination positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adient PLC position performs unexpectedly, Destination 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 Destination will offset losses from the drop in Destination's long position.
The idea behind Adient PLC and Destination XL Group 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.
Check out your portfolio center.
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.

Other Complementary Tools

Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
Price Transformation
Use Price Transformation models to analyze the depth of different equity instruments across global markets
Content Syndication
Quickly integrate customizable finance content to your own investment portal
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Bonds Directory
Find actively traded corporate debentures issued by US companies