Correlation Between Ford and Danske Invest
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By analyzing existing cross correlation between Ford Motor and Danske Invest Mix, you can compare the effects of market volatilities on Ford and Danske Invest 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 Danske Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Danske Invest.
Diversification Opportunities for Ford and Danske Invest
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ford and Danske is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Danske Invest Mix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danske Invest Mix 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 Danske Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danske Invest Mix has no effect on the direction of Ford i.e., Ford and Danske Invest go up and down completely randomly.
Pair Corralation between Ford and Danske Invest
Taking into account the 90-day investment horizon Ford Motor is expected to generate 9.04 times more return on investment than Danske Invest. However, Ford is 9.04 times more volatile than Danske Invest Mix. It trades about 0.01 of its potential returns per unit of risk. Danske Invest Mix is currently generating about -0.34 per unit of risk. If you would invest 1,290 in Ford Motor on January 24, 2024 and sell it today you would lose (2.00) from holding Ford Motor or give up 0.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 90.0% |
| Values | Daily Returns |
Ford Motor vs. Danske Invest Mix
Performance |
| Timeline |
| Ford Motor |
| Danske Invest Mix |
Ford and Danske Invest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Danske Invest
The main advantage of trading using opposite Ford and Danske Invest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Danske Invest 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 Danske Invest will offset losses from the drop in Danske Invest's long position.The idea behind Ford Motor and Danske Invest Mix 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.| Danske Invest vs. Novo Nordisk AS | Danske Invest vs. Nordea Bank Abp | Danske Invest vs. DSV Panalpina AS | Danske Invest vs. AP Mller |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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