Correlation Between Ford and DNB ASA
Can any of the company-specific risk be diversified away by investing in both Ford and DNB ASA 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 Ford and DNB ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and DNB ASA, you can compare the effects of market volatilities on Ford and DNB ASA 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 Ford with a short position of DNB ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and DNB ASA.
Diversification Opportunities for Ford and DNB ASA
Pay attention - limited upside
The 3 months correlation between Ford and DNB is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and DNB ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DNB ASA and Ford 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 Ford Motor are associated (or correlated) with DNB ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DNB ASA has no effect on the direction of Ford i.e., Ford and DNB ASA go up and down completely randomly.
Pair Corralation between Ford and DNB ASA
If you would invest 1,244 in Ford Motor on January 26, 2024 and sell it today you would earn a total of 51.00 from holding Ford Motor or generate 4.1% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Ford Motor vs. DNB ASA
Performance |
Timeline |
Ford Motor |
DNB ASA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ford and DNB ASA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ford and DNB ASA
The main advantage of trading using opposite Ford and DNB ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, DNB ASA 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 DNB ASA will offset losses from the drop in DNB ASA's long position.The idea behind Ford Motor and DNB ASA 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.DNB ASA vs. Dominos Pizza | DNB ASA vs. Chipotle Mexican Grill | DNB ASA vs. Shake Shack | DNB ASA vs. Kura Sushi USA |
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 Stocks Directory module to find actively traded stocks across global markets.
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