Correlation Between Ford and Alkim Kagit
Can any of the company-specific risk be diversified away by investing in both Ford and Alkim Kagit 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 Alkim Kagit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Alkim Kagit Sanayi, you can compare the effects of market volatilities on Ford and Alkim Kagit 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 Alkim Kagit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Alkim Kagit.
Diversification Opportunities for Ford and Alkim Kagit
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ford and Alkim is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Alkim Kagit Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alkim Kagit 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 Alkim Kagit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alkim Kagit Sanayi has no effect on the direction of Ford i.e., Ford and Alkim Kagit go up and down completely randomly.
Pair Corralation between Ford and Alkim Kagit
Taking into account the 90-day investment horizon Ford is expected to generate 1.35 times less return on investment than Alkim Kagit. But when comparing it to its historical volatility, Ford Motor is 1.52 times less risky than Alkim Kagit. It trades about 0.01 of its potential returns per unit of risk. Alkim Kagit Sanayi is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 3,013 in Alkim Kagit Sanayi on September 3, 2024 and sell it today you would lose (389.00) from holding Alkim Kagit Sanayi or give up 12.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Ford Motor vs. Alkim Kagit Sanayi
Performance |
| Timeline |
| Ford Motor |
| Alkim Kagit Sanayi |
Ford and Alkim Kagit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Alkim Kagit
The main advantage of trading using opposite Ford and Alkim Kagit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Alkim Kagit 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 Alkim Kagit will offset losses from the drop in Alkim Kagit's long position.| Ford vs. GreenPower Motor | Ford vs. ZEEKR Intelligent Technology | Ford vs. Volcon Inc | Ford vs. Ford Motor |
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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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