Correlation Between Ford and LUMI GRUPPEN
Can any of the company-specific risk be diversified away by investing in both Ford and LUMI GRUPPEN 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 LUMI GRUPPEN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and LUMI GRUPPEN AS, you can compare the effects of market volatilities on Ford and LUMI GRUPPEN 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 LUMI GRUPPEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and LUMI GRUPPEN.
Diversification Opportunities for Ford and LUMI GRUPPEN
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and LUMI is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and LUMI GRUPPEN AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LUMI GRUPPEN 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 LUMI GRUPPEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LUMI GRUPPEN AS has no effect on the direction of Ford i.e., Ford and LUMI GRUPPEN go up and down completely randomly.
Pair Corralation between Ford and LUMI GRUPPEN
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the LUMI GRUPPEN. But the stock apears to be less risky and, when comparing its historical volatility, Ford Motor is 4.33 times less risky than LUMI GRUPPEN. The stock trades about -0.48 of its potential returns per unit of risk. The LUMI GRUPPEN AS is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 85.00 in LUMI GRUPPEN AS on September 24, 2024 and sell it today you would earn a total of 13.00 from holding LUMI GRUPPEN AS or generate 15.29% 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. LUMI GRUPPEN AS
Performance |
| Timeline |
| Ford Motor |
| LUMI GRUPPEN AS |
Ford and LUMI GRUPPEN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and LUMI GRUPPEN
The main advantage of trading using opposite Ford and LUMI GRUPPEN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, LUMI GRUPPEN 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 LUMI GRUPPEN will offset losses from the drop in LUMI GRUPPEN's long position.The idea behind Ford Motor and LUMI GRUPPEN 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.| LUMI GRUPPEN vs. LG Display Co | LUMI GRUPPEN vs. CHEMICAL INDUSTRIES | LUMI GRUPPEN vs. NISSAN CHEMICAL IND | LUMI GRUPPEN vs. Nissan Chemical 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |