Correlation Between Ford and Akcansa Cimento
Can any of the company-specific risk be diversified away by investing in both Ford and Akcansa Cimento 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 Akcansa Cimento into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Akcansa Cimento Sanayi, you can compare the effects of market volatilities on Ford and Akcansa Cimento 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 Akcansa Cimento. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Akcansa Cimento.
Diversification Opportunities for Ford and Akcansa Cimento
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ford and Akcansa is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Akcansa Cimento Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akcansa Cimento Sanayi 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 Akcansa Cimento. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akcansa Cimento Sanayi has no effect on the direction of Ford i.e., Ford and Akcansa Cimento go up and down completely randomly.
Pair Corralation between Ford and Akcansa Cimento
Taking into account the 90-day investment horizon Ford is expected to generate 1.92 times less return on investment than Akcansa Cimento. But when comparing it to its historical volatility, Ford Motor is 1.09 times less risky than Akcansa Cimento. It trades about 0.13 of its potential returns per unit of risk. Akcansa Cimento Sanayi is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 17,640 in Akcansa Cimento Sanayi on October 24, 2024 and sell it today you would earn a total of 1,160 from holding Akcansa Cimento Sanayi or generate 6.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 85.71% |
| Values | Daily Returns |
Ford Motor vs. Akcansa Cimento Sanayi
Performance |
| Timeline |
| Ford Motor |
| Akcansa Cimento Sanayi |
Ford and Akcansa Cimento Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Akcansa Cimento
The main advantage of trading using opposite Ford and Akcansa Cimento positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Akcansa Cimento 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 Akcansa Cimento will offset losses from the drop in Akcansa Cimento's long position.The idea behind Ford Motor and Akcansa Cimento Sanayi 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.| Akcansa Cimento vs. CEO Event Medya | Akcansa Cimento vs. Borlease Otomotiv AS | Akcansa Cimento vs. Trabzonspor Sportif Yatirim | Akcansa Cimento vs. Turkiye Kalkinma Bankasi |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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