Correlation Between Ford and Ashot Ashkelon
Can any of the company-specific risk be diversified away by investing in both Ford and Ashot Ashkelon 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 Ashot Ashkelon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Ashot Ashkelon Industries, you can compare the effects of market volatilities on Ford and Ashot Ashkelon 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 Ashot Ashkelon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Ashot Ashkelon.
Diversification Opportunities for Ford and Ashot Ashkelon
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ford and Ashot is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Ashot Ashkelon Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashot Ashkelon Industries 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 Ashot Ashkelon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashot Ashkelon Industries has no effect on the direction of Ford i.e., Ford and Ashot Ashkelon go up and down completely randomly.
Pair Corralation between Ford and Ashot Ashkelon
Taking into account the 90-day investment horizon Ford is expected to generate 1.49 times less return on investment than Ashot Ashkelon. But when comparing it to its historical volatility, Ford Motor is 1.62 times less risky than Ashot Ashkelon. It trades about 0.09 of its potential returns per unit of risk. Ashot Ashkelon Industries is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 273,500 in Ashot Ashkelon Industries on January 26, 2024 and sell it today you would earn a total of 11,500 from holding Ashot Ashkelon Industries or generate 4.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 76.19% |
| Values | Daily Returns |
Ford Motor vs. Ashot Ashkelon Industries
Performance |
| Timeline |
| Ford Motor |
| Ashot Ashkelon Industries |
Ford and Ashot Ashkelon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Ashot Ashkelon
The main advantage of trading using opposite Ford and Ashot Ashkelon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Ashot Ashkelon 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 Ashot Ashkelon will offset losses from the drop in Ashot Ashkelon's long position.The idea behind Ford Motor and Ashot Ashkelon Industries 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.| Ashot Ashkelon vs. Alony Hetz Properties | Ashot Ashkelon vs. Melisron | Ashot Ashkelon vs. Shufersal | Ashot Ashkelon vs. Israel Discount Bank |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| CEOs Directory Screen CEOs from public companies around the world | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |