Correlation Between Ford and Mahaka Media
Can any of the company-specific risk be diversified away by investing in both Ford and Mahaka Media 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 Mahaka Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Mahaka Media Tbk, you can compare the effects of market volatilities on Ford and Mahaka Media 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 Mahaka Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Mahaka Media.
Diversification Opportunities for Ford and Mahaka Media
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and Mahaka is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Mahaka Media Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mahaka Media Tbk 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 Mahaka Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mahaka Media Tbk has no effect on the direction of Ford i.e., Ford and Mahaka Media go up and down completely randomly.
Pair Corralation between Ford and Mahaka Media
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.69 times more return on investment than Mahaka Media. However, Ford Motor is 1.46 times less risky than Mahaka Media. It trades about 0.01 of its potential returns per unit of risk. Mahaka Media Tbk is currently generating about -0.09 per unit of risk. If you would invest 1,110 in Ford Motor on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Ford Motor or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.76% |
| Values | Daily Returns |
Ford Motor vs. Mahaka Media Tbk
Performance |
| Timeline |
| Ford Motor |
| Mahaka Media Tbk |
Ford and Mahaka Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Mahaka Media
The main advantage of trading using opposite Ford and Mahaka Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Mahaka Media 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 Mahaka Media will offset losses from the drop in Mahaka Media's long position.The idea behind Ford Motor and Mahaka Media Tbk 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.| Mahaka Media vs. Mnc Land Tbk | Mahaka Media vs. MNC Vision Networks | Mahaka Media vs. Medikaloka Hermina PT |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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