Correlation Between Ford and AK Sigorta
Can any of the company-specific risk be diversified away by investing in both Ford and AK Sigorta 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 AK Sigorta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and AK Sigorta AS, you can compare the effects of market volatilities on Ford and AK Sigorta 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 AK Sigorta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and AK Sigorta.
Diversification Opportunities for Ford and AK Sigorta
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ford and AKGRT is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and AK Sigorta AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AK Sigorta AS 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 AK Sigorta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AK Sigorta AS has no effect on the direction of Ford i.e., Ford and AK Sigorta go up and down completely randomly.
Pair Corralation between Ford and AK Sigorta
Taking into account the 90-day investment horizon Ford is expected to generate 8.96 times less return on investment than AK Sigorta. But when comparing it to its historical volatility, Ford Motor is 1.49 times less risky than AK Sigorta. It trades about 0.01 of its potential returns per unit of risk. AK Sigorta AS is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 369.00 in AK Sigorta AS on September 4, 2024 and sell it today you would earn a total of 286.00 from holding AK Sigorta AS or generate 77.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.39% |
| Values | Daily Returns |
Ford Motor vs. AK Sigorta AS
Performance |
| Timeline |
| Ford Motor |
| AK Sigorta AS |
Ford and AK Sigorta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and AK Sigorta
The main advantage of trading using opposite Ford and AK Sigorta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, AK Sigorta 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 AK Sigorta will offset losses from the drop in AK Sigorta's long position.The idea behind Ford Motor and AK Sigorta AS 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.| AK Sigorta vs. Tofas Turk Otomobil | AK Sigorta vs. Aksa Akrilik Kimya | AK Sigorta vs. Vestel Beyaz Esya | AK Sigorta vs. Is Yatirim Menkul |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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