Correlation Between Ford and AMEN Properties
Can any of the company-specific risk be diversified away by investing in both Ford and AMEN Properties 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 AMEN Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and AMEN Properties, you can compare the effects of market volatilities on Ford and AMEN Properties 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 AMEN Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and AMEN Properties.
Diversification Opportunities for Ford and AMEN Properties
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ford and AMEN is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and AMEN Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMEN Properties 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 AMEN Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMEN Properties has no effect on the direction of Ford i.e., Ford and AMEN Properties go up and down completely randomly.
Pair Corralation between Ford and AMEN Properties
If you would invest 1,109 in Ford Motor on August 25, 2024 and sell it today you would earn a total of 9.00 from holding Ford Motor or generate 0.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Ford Motor vs. AMEN Properties
Performance |
| Timeline |
| Ford Motor |
| AMEN Properties |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ford and AMEN Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and AMEN Properties
The main advantage of trading using opposite Ford and AMEN Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, AMEN Properties 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 AMEN Properties will offset losses from the drop in AMEN Properties' long position.The idea behind Ford Motor and AMEN Properties 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.| AMEN Properties vs. AER Energy Resources | AMEN Properties vs. Altura Energy | AMEN Properties vs. Alamo Energy Corp | AMEN Properties vs. Arete Industries |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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