Correlation Between Ford and Asia Carbon
Can any of the company-specific risk be diversified away by investing in both Ford and Asia Carbon 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 Asia Carbon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Asia Carbon Industries, you can compare the effects of market volatilities on Ford and Asia Carbon 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 Asia Carbon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Asia Carbon.
Diversification Opportunities for Ford and Asia Carbon
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ford and Asia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Asia Carbon Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Carbon Industries 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 Asia Carbon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Carbon Industries has no effect on the direction of Ford i.e., Ford and Asia Carbon go up and down completely randomly.
Pair Corralation between Ford and Asia Carbon
If you would invest 1,122 in Ford Motor on August 28, 2024 and sell it today you would earn a total of 18.00 from holding Ford Motor or generate 1.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ford Motor vs. Asia Carbon Industries
Performance |
| Timeline |
| Ford Motor |
| Asia Carbon Industries |
Ford and Asia Carbon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Asia Carbon
The main advantage of trading using opposite Ford and Asia Carbon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Asia Carbon 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 Asia Carbon will offset losses from the drop in Asia Carbon's long position.The idea behind Ford Motor and Asia Carbon Industries 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.| Asia Carbon vs. Avoca LLC | Asia Carbon vs. AGC Inc ADR | Asia Carbon vs. Arkema SA ADR | Asia Carbon vs. AirBoss of America |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |