Correlation Between Ford and Alpine Select
Can any of the company-specific risk be diversified away by investing in both Ford and Alpine Select 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 Alpine Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Alpine Select AG, you can compare the effects of market volatilities on Ford and Alpine Select 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 Alpine Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Alpine Select.
Diversification Opportunities for Ford and Alpine Select
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ford and Alpine is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Alpine Select AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpine Select AG 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 Alpine Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpine Select AG has no effect on the direction of Ford i.e., Ford and Alpine Select go up and down completely randomly.
Pair Corralation between Ford and Alpine Select
Taking into account the 90-day investment horizon Ford is expected to generate 15.77 times less return on investment than Alpine Select. But when comparing it to its historical volatility, Ford Motor is 4.19 times less risky than Alpine Select. It trades about 0.01 of its potential returns per unit of risk. Alpine Select AG is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 766.00 in Alpine Select AG on August 29, 2024 and sell it today you would lose (16.00) from holding Alpine Select AG or give up 2.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 71.17% |
| Values | Daily Returns |
Ford Motor vs. Alpine Select AG
Performance |
| Timeline |
| Ford Motor |
| Alpine Select AG |
Ford and Alpine Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Alpine Select
The main advantage of trading using opposite Ford and Alpine Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Alpine Select 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 Alpine Select will offset losses from the drop in Alpine Select's long position.The idea behind Ford Motor and Alpine Select AG 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.| Alpine Select vs. Nebag ag | Alpine Select vs. Carlo Gavazzi Holding | Alpine Select vs. Private Equity Holding | Alpine Select vs. Bellevue Group AG |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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