Correlation Between Ford and Seluxit AS
Can any of the company-specific risk be diversified away by investing in both Ford and Seluxit AS 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 Seluxit AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Seluxit AS, you can compare the effects of market volatilities on Ford and Seluxit AS 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 Seluxit AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Seluxit AS.
Diversification Opportunities for Ford and Seluxit AS
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ford and Seluxit is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Seluxit AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seluxit AS 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 Seluxit AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seluxit AS has no effect on the direction of Ford i.e., Ford and Seluxit AS go up and down completely randomly.
Pair Corralation between Ford and Seluxit AS
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Seluxit AS. But the stock apears to be less risky and, when comparing its historical volatility, Ford Motor is 3.3 times less risky than Seluxit AS. The stock trades about -0.14 of its potential returns per unit of risk. The Seluxit AS is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 260.00 in Seluxit AS on January 20, 2024 and sell it today you would earn a total of 62.00 from holding Seluxit AS or generate 23.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Ford Motor vs. Seluxit AS
Performance |
| Timeline |
| Ford Motor |
| Seluxit AS |
Ford and Seluxit AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Seluxit AS
The main advantage of trading using opposite Ford and Seluxit AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Seluxit AS 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 Seluxit AS will offset losses from the drop in Seluxit AS's long position.The idea behind Ford Motor and Seluxit AS 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.| Seluxit AS vs. North Media AS | Seluxit AS vs. BankInvest Value Globale | Seluxit AS vs. TROPHY GAMES Development | Seluxit AS vs. Nordfyns Bank AS |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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