Correlation Between Autoliv and Superior Industries

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

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

Diversification Opportunities for Autoliv and Superior Industries

-0.38

Correlation Coefficient

Autoliv  Superior Industries

Very good diversification

The 3 months correlation between Autoliv and Superior is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Autoliv and Superior Industries Internatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Industries and Autoliv 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 Autoliv are associated (or correlated) with Superior Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Industries has no effect on the direction of Autoliv i.e., Autoliv and Superior Industries go up and down completely randomly.

Pair Corralation between Autoliv and Superior Industries

Considering the 90-day investment horizon Autoliv is expected to generate 0.62 times more return on investment than Superior Industries. However, Autoliv is 1.62 times less risky than Superior Industries. It trades about 0.0 of its potential returns per unit of risk. Superior Industries International is currently generating about -0.17 per unit of risk. If you would invest  9,234  in Autoliv on September 23, 2024 and sell it today you would lose (44.00) from holding Autoliv or give up 0.48% of portfolio value over 90 days.

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

Autoliv  vs.  Superior Industries Internatio

Autoliv

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Autoliv has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable essential indicators, Autoliv is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Superior Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Superior Industries International has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Autoliv and Superior Industries

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

The idea behind Autoliv and Superior Industries International 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.