Correlation Between Ford and Ally Leasehold
Can any of the company-specific risk be diversified away by investing in both Ford and Ally Leasehold 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 Ally Leasehold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Ally Leasehold Real, you can compare the effects of market volatilities on Ford and Ally Leasehold 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 Ally Leasehold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Ally Leasehold.
Diversification Opportunities for Ford and Ally Leasehold
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ford and Ally is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Ally Leasehold Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ally Leasehold Real 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 Ally Leasehold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ally Leasehold Real has no effect on the direction of Ford i.e., Ford and Ally Leasehold go up and down completely randomly.
Pair Corralation between Ford and Ally Leasehold
Taking into account the 90-day investment horizon Ford Motor is expected to generate 1.93 times more return on investment than Ally Leasehold. However, Ford is 1.93 times more volatile than Ally Leasehold Real. It trades about 0.17 of its potential returns per unit of risk. Ally Leasehold Real is currently generating about 0.03 per unit of risk. If you would invest 1,033 in Ford Motor on August 31, 2024 and sell it today you would earn a total of 77.00 from holding Ford Motor or generate 7.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Ally Leasehold Real
Performance |
| Timeline |
| Ford Motor |
| Ally Leasehold Real |
Ford and Ally Leasehold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Ally Leasehold
The main advantage of trading using opposite Ford and Ally Leasehold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Ally Leasehold 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 Ally Leasehold will offset losses from the drop in Ally Leasehold's long position.The idea behind Ford Motor and Ally Leasehold Real 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.| Ally Leasehold vs. AIM Industrial Growth | Ally Leasehold vs. Dusit Thani Freehold | Ally Leasehold vs. CPN Retail Growth | Ally Leasehold vs. Amata Summit Growth |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |