Correlation Between Ford and Akelius Residential
Can any of the company-specific risk be diversified away by investing in both Ford and Akelius Residential 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 Akelius Residential into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Akelius Residential Property, you can compare the effects of market volatilities on Ford and Akelius Residential 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 Akelius Residential. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Akelius Residential.
Diversification Opportunities for Ford and Akelius Residential
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and Akelius is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Akelius Residential Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akelius Residential 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 Akelius Residential. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akelius Residential has no effect on the direction of Ford i.e., Ford and Akelius Residential go up and down completely randomly.
Pair Corralation between Ford and Akelius Residential
Taking into account the 90-day investment horizon Ford is expected to generate 26.71 times less return on investment than Akelius Residential. But when comparing it to its historical volatility, Ford Motor is 1.35 times less risky than Akelius Residential. It trades about 0.01 of its potential returns per unit of risk. Akelius Residential Property is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 163.00 in Akelius Residential Property on November 30, 2024 and sell it today you would earn a total of 25.00 from holding Akelius Residential Property or generate 15.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.62% |
| Values | Daily Returns |
Ford Motor vs. Akelius Residential Property
Performance |
| Timeline |
| Ford Motor |
| Akelius Residential |
Ford and Akelius Residential Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Akelius Residential
The main advantage of trading using opposite Ford and Akelius Residential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Akelius Residential 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 Akelius Residential will offset losses from the drop in Akelius Residential's long position.The idea behind Ford Motor and Akelius Residential Property 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.| Akelius Residential vs. Castellum AB | Akelius Residential vs. Fabege AB | Akelius Residential vs. AB Sagax | Akelius Residential vs. Wallenstam AB |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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