Correlation Between Ford and Advancetek Enterprise
Can any of the company-specific risk be diversified away by investing in both Ford and Advancetek Enterprise 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 Advancetek Enterprise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Advancetek Enterprise Co, you can compare the effects of market volatilities on Ford and Advancetek Enterprise 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 Advancetek Enterprise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Advancetek Enterprise.
Diversification Opportunities for Ford and Advancetek Enterprise
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ford and Advancetek is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Advancetek Enterprise Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advancetek Enterprise 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 Advancetek Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advancetek Enterprise has no effect on the direction of Ford i.e., Ford and Advancetek Enterprise go up and down completely randomly.
Pair Corralation between Ford and Advancetek Enterprise
Taking into account the 90-day investment horizon Ford is expected to generate 6.85 times less return on investment than Advancetek Enterprise. In addition to that, Ford is 1.11 times more volatile than Advancetek Enterprise Co. It trades about 0.01 of its total potential returns per unit of risk. Advancetek Enterprise Co is currently generating about 0.09 per unit of volatility. If you would invest 3,810 in Advancetek Enterprise Co on August 30, 2024 and sell it today you would earn a total of 4,320 from holding Advancetek Enterprise Co or generate 113.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.77% |
| Values | Daily Returns |
Ford Motor vs. Advancetek Enterprise Co
Performance |
| Timeline |
| Ford Motor |
| Advancetek Enterprise |
Ford and Advancetek Enterprise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Advancetek Enterprise
The main advantage of trading using opposite Ford and Advancetek Enterprise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Advancetek Enterprise 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 Advancetek Enterprise will offset losses from the drop in Advancetek Enterprise's long position.The idea behind Ford Motor and Advancetek Enterprise Co 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.| Advancetek Enterprise vs. Tainan Spinning Co | Advancetek Enterprise vs. Carnival Industrial Corp | Advancetek Enterprise vs. Symtek Automation Asia | Advancetek Enterprise vs. CTCI Corp |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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