Correlation Between Ford and Atlantic Coastal
Can any of the company-specific risk be diversified away by investing in both Ford and Atlantic Coastal 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 Atlantic Coastal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Atlantic Coastal Acquisition, you can compare the effects of market volatilities on Ford and Atlantic Coastal 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 Atlantic Coastal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Atlantic Coastal.
Diversification Opportunities for Ford and Atlantic Coastal
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ford and Atlantic is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Atlantic Coastal Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlantic Coastal Acq 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 Atlantic Coastal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlantic Coastal Acq has no effect on the direction of Ford i.e., Ford and Atlantic Coastal go up and down completely randomly.
Pair Corralation between Ford and Atlantic Coastal
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Atlantic Coastal. But the stock apears to be less risky and, when comparing its historical volatility, Ford Motor is 132.18 times less risky than Atlantic Coastal. The stock trades about -0.01 of its potential returns per unit of risk. The Atlantic Coastal Acquisition is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 9.00 in Atlantic Coastal Acquisition on September 3, 2024 and sell it today you would lose (1.00) from holding Atlantic Coastal Acquisition or give up 11.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 6.85% |
| Values | Daily Returns |
Ford Motor vs. Atlantic Coastal Acquisition
Performance |
| Timeline |
| Ford Motor |
| Atlantic Coastal Acq |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ford and Atlantic Coastal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Atlantic Coastal
The main advantage of trading using opposite Ford and Atlantic Coastal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Atlantic Coastal 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 Atlantic Coastal will offset losses from the drop in Atlantic Coastal's long position.| Ford vs. GreenPower Motor | Ford vs. ZEEKR Intelligent Technology | Ford vs. Volcon Inc | Ford vs. Ford Motor |
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 Managers module to screen money managers from public funds and ETFs managed around the world.
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