Correlation Between Ford and Absa Multi
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By analyzing existing cross correlation between Ford Motor and Absa Multi Managed, you can compare the effects of market volatilities on Ford and Absa Multi 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 Absa Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Absa Multi.
Diversification Opportunities for Ford and Absa Multi
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ford and Absa is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Absa Multi Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Absa Multi Managed 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 Absa Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Absa Multi Managed has no effect on the direction of Ford i.e., Ford and Absa Multi go up and down completely randomly.
Pair Corralation between Ford and Absa Multi
Taking into account the 90-day investment horizon Ford Motor is expected to generate 4.84 times more return on investment than Absa Multi. However, Ford is 4.84 times more volatile than Absa Multi Managed. It trades about 0.14 of its potential returns per unit of risk. Absa Multi Managed is currently generating about 0.3 per unit of risk. If you would invest 1,022 in Ford Motor on September 5, 2024 and sell it today you would earn a total of 60.00 from holding Ford Motor or generate 5.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ford Motor vs. Absa Multi Managed
Performance |
| Timeline |
| Ford Motor |
| Absa Multi Managed |
Ford and Absa Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Absa Multi
The main advantage of trading using opposite Ford and Absa Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Absa Multi 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 Absa Multi will offset losses from the drop in Absa Multi's long position.The idea behind Ford Motor and Absa Multi Managed 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.| Absa Multi vs. Absa Multi managed Absolute | Absa Multi vs. Absa Prudential | Absa Multi vs. Absa Multi Managed | Absa Multi vs. Absa Multi Managed |
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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