Correlation Between Ford and Acset Indonusa
Can any of the company-specific risk be diversified away by investing in both Ford and Acset Indonusa 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 Acset Indonusa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Acset Indonusa Tbk, you can compare the effects of market volatilities on Ford and Acset Indonusa 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 Acset Indonusa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Acset Indonusa.
Diversification Opportunities for Ford and Acset Indonusa
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and Acset is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Acset Indonusa Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acset Indonusa 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 Acset Indonusa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acset Indonusa Tbk has no effect on the direction of Ford i.e., Ford and Acset Indonusa go up and down completely randomly.
Pair Corralation between Ford and Acset Indonusa
Taking into account the 90-day investment horizon Ford Motor is expected to generate 1.11 times more return on investment than Acset Indonusa. However, Ford is 1.11 times more volatile than Acset Indonusa Tbk. It trades about 0.05 of its potential returns per unit of risk. Acset Indonusa Tbk is currently generating about -0.15 per unit of risk. If you would invest 1,089 in Ford Motor on August 28, 2024 and sell it today you would earn a total of 51.00 from holding Ford Motor or generate 4.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Acset Indonusa Tbk
Performance |
| Timeline |
| Ford Motor |
| Acset Indonusa Tbk |
Ford and Acset Indonusa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Acset Indonusa
The main advantage of trading using opposite Ford and Acset Indonusa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Acset Indonusa 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 Acset Indonusa will offset losses from the drop in Acset Indonusa's long position.The idea behind Ford Motor and Acset Indonusa 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.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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |