Correlation Between Ford and Aikchol Hospital
Can any of the company-specific risk be diversified away by investing in both Ford and Aikchol Hospital 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 Aikchol Hospital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Aikchol Hospital Public, you can compare the effects of market volatilities on Ford and Aikchol Hospital 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 Aikchol Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Aikchol Hospital.
Diversification Opportunities for Ford and Aikchol Hospital
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ford and Aikchol is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Aikchol Hospital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aikchol Hospital Public 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 Aikchol Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aikchol Hospital Public has no effect on the direction of Ford i.e., Ford and Aikchol Hospital go up and down completely randomly.
Pair Corralation between Ford and Aikchol Hospital
Taking into account the 90-day investment horizon Ford is expected to generate 53.29 times less return on investment than Aikchol Hospital. But when comparing it to its historical volatility, Ford Motor is 27.93 times less risky than Aikchol Hospital. It trades about 0.03 of its potential returns per unit of risk. Aikchol Hospital Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,717 in Aikchol Hospital Public on August 29, 2024 and sell it today you would lose (137.00) from holding Aikchol Hospital Public or give up 7.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 96.37% |
| Values | Daily Returns |
Ford Motor vs. Aikchol Hospital Public
Performance |
| Timeline |
| Ford Motor |
| Aikchol Hospital Public |
Ford and Aikchol Hospital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Aikchol Hospital
The main advantage of trading using opposite Ford and Aikchol Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Aikchol Hospital 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 Aikchol Hospital will offset losses from the drop in Aikchol Hospital's long position.The idea behind Ford Motor and Aikchol Hospital Public 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.| Aikchol Hospital vs. AP Public | Aikchol Hospital vs. Bumrungrad Hospital Public | Aikchol Hospital vs. Advanced Information Technology | Aikchol Hospital vs. AJ Plast Public |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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