Correlation Between Ford and Acm Research
Can any of the company-specific risk be diversified away by investing in both Ford and Acm Research 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 Acm Research into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Acm Research, you can compare the effects of market volatilities on Ford and Acm Research 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 Acm Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Acm Research.
Diversification Opportunities for Ford and Acm Research
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ford and Acm is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Acm Research in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acm Research 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 Acm Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acm Research has no effect on the direction of Ford i.e., Ford and Acm Research go up and down completely randomly.
Pair Corralation between Ford and Acm Research
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.84 times more return on investment than Acm Research. However, Ford Motor is 1.19 times less risky than Acm Research. It trades about 0.01 of its potential returns per unit of risk. Acm Research is currently generating about -0.05 per unit of risk. If you would invest 1,122 in Ford Motor on August 27, 2024 and sell it today you would lose (4.00) from holding Ford Motor or give up 0.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Acm Research
Performance |
| Timeline |
| Ford Motor |
| Acm Research |
Ford and Acm Research Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Acm Research
The main advantage of trading using opposite Ford and Acm Research positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Acm Research 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 Acm Research will offset losses from the drop in Acm Research's long position.The idea behind Ford Motor and Acm Research 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.| Acm Research vs. Axcelis Technologies | Acm Research vs. inTest | Acm Research vs. Lam Research Corp | Acm Research vs. Photronics |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |