Correlation Between Ford and Amplifon SpA
Can any of the company-specific risk be diversified away by investing in both Ford and Amplifon SpA 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 Amplifon SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Amplifon SpA, you can compare the effects of market volatilities on Ford and Amplifon SpA 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 Amplifon SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Amplifon SpA.
Diversification Opportunities for Ford and Amplifon SpA
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ford and Amplifon is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Amplifon SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplifon SpA 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 Amplifon SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplifon SpA has no effect on the direction of Ford i.e., Ford and Amplifon SpA go up and down completely randomly.
Pair Corralation between Ford and Amplifon SpA
Taking into account the 90-day investment horizon Ford is expected to generate 8.3 times less return on investment than Amplifon SpA. But when comparing it to its historical volatility, Ford Motor is 2.25 times less risky than Amplifon SpA. It trades about 0.01 of its potential returns per unit of risk. Amplifon SpA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,049 in Amplifon SpA on September 3, 2024 and sell it today you would earn a total of 451.00 from holding Amplifon SpA or generate 14.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 49.09% |
| Values | Daily Returns |
Ford Motor vs. Amplifon SpA
Performance |
| Timeline |
| Ford Motor |
| Amplifon SpA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ford and Amplifon SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Amplifon SpA
The main advantage of trading using opposite Ford and Amplifon SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Amplifon SpA 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 Amplifon SpA will offset losses from the drop in Amplifon SpA's long position.| Ford vs. GreenPower Motor | Ford vs. ZEEKR Intelligent Technology | Ford vs. Volcon Inc | Ford vs. Ford Motor |
| Amplifon SpA vs. Sonida Senior Living | Amplifon SpA vs. Cumberland Pharmaceuticals | Amplifon SpA vs. Aquestive Therapeutics | Amplifon SpA vs. Cardinal Health |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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