Correlation Between Ford and ABM International
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By analyzing existing cross correlation between Ford Motor and ABM International Limited, you can compare the effects of market volatilities on Ford and ABM International 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 ABM International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and ABM International.
Diversification Opportunities for Ford and ABM International
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ford and ABM is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and ABM International Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABM International 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 ABM International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABM International has no effect on the direction of Ford i.e., Ford and ABM International go up and down completely randomly.
Pair Corralation between Ford and ABM International
Taking into account the 90-day investment horizon Ford is expected to generate 5.13 times less return on investment than ABM International. But when comparing it to its historical volatility, Ford Motor is 1.76 times less risky than ABM International. It trades about 0.01 of its potential returns per unit of risk. ABM International Limited is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 5,775 in ABM International Limited on October 20, 2024 and sell it today you would earn a total of 465.00 from holding ABM International Limited or generate 8.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.39% |
| Values | Daily Returns |
Ford Motor vs. ABM International Limited
Performance |
| Timeline |
| Ford Motor |
| ABM International |
Ford and ABM International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and ABM International
The main advantage of trading using opposite Ford and ABM International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, ABM International 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 ABM International will offset losses from the drop in ABM International's long position.The idea behind Ford Motor and ABM International Limited 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.| ABM International vs. NMDC Limited | ABM International vs. Steel Authority of | ABM International vs. Embassy Office Parks | ABM International vs. Jai Balaji Industries |
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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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