Correlation Between Ford and Wisekey International

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

By analyzing existing cross correlation between Ford Motor and Wisekey International Holding, you can compare the effects of market volatilities on Ford and Wisekey International 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 Wisekey International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Wisekey International.

Diversification Opportunities for Ford and Wisekey International

-0.08

Correlation Coefficient

Ford  Wisekey International

Good diversification

The 3 months correlation between Ford and Wisekey is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Wisekey International Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wisekey International 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 Wisekey International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wisekey International has no effect on the direction of Ford i.e., Ford and Wisekey International go up and down completely randomly.

Pair Corralation between Ford and Wisekey International

Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.31 times more return on investment than Wisekey International. However, Ford Motor is 3.27 times less risky than Wisekey International. It trades about 0.03 of its potential returns per unit of risk. Wisekey International Holding is currently generating about -0.03 per unit of risk. If you would invest  1,125  in Ford Motor on February 3, 2024 and sell it today you would earn a total of  118.00  from holding Ford Motor or generate 10.49% return on investment over 90 days.

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

Ford Motor  vs.  Wisekey International Holding

Ford Motor

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ford Motor are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating technical and fundamental indicators, Ford may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Wisekey International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wisekey International Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Ford and Wisekey International

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

The idea behind Ford Motor and Wisekey International Holding 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.