Correlation Between Ford and Alstria Office
Can any of the company-specific risk be diversified away by investing in both Ford and Alstria Office 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 Alstria Office into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and alstria office REIT AG, you can compare the effects of market volatilities on Ford and Alstria Office 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 Alstria Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Alstria Office.
Diversification Opportunities for Ford and Alstria Office
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ford and Alstria is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and alstria office REIT AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on alstria office REIT 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 Alstria Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of alstria office REIT has no effect on the direction of Ford i.e., Ford and Alstria Office go up and down completely randomly.
Pair Corralation between Ford and Alstria Office
Taking into account the 90-day investment horizon Ford Motor is expected to generate 3.89 times more return on investment than Alstria Office. However, Ford is 3.89 times more volatile than alstria office REIT AG. It trades about 0.18 of its potential returns per unit of risk. alstria office REIT AG is currently generating about -0.26 per unit of risk. If you would invest 892.00 in Ford Motor on December 13, 2024 and sell it today you would earn a total of 67.00 from holding Ford Motor or generate 7.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ford Motor vs. alstria office REIT AG
Performance |
| Timeline |
| Ford Motor |
| alstria office REIT |
Ford and Alstria Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Alstria Office
The main advantage of trading using opposite Ford and Alstria Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Alstria Office 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 Alstria Office will offset losses from the drop in Alstria Office's long position.The idea behind Ford Motor and alstria office REIT AG 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.| Alstria Office vs. Zegona Communications Plc | Alstria Office vs. Mobile Tornado Group | Alstria Office vs. Sabien Technology Group | Alstria Office vs. Charter Communications Cl |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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