Correlation Between Ford and AroCell AB
Can any of the company-specific risk be diversified away by investing in both Ford and AroCell AB 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 AroCell AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and AroCell AB, you can compare the effects of market volatilities on Ford and AroCell AB 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 AroCell AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and AroCell AB.
Diversification Opportunities for Ford and AroCell AB
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and AroCell is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and AroCell AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AroCell AB 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 AroCell AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AroCell AB has no effect on the direction of Ford i.e., Ford and AroCell AB go up and down completely randomly.
Pair Corralation between Ford and AroCell AB
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.52 times more return on investment than AroCell AB. However, Ford Motor is 1.93 times less risky than AroCell AB. It trades about 0.22 of its potential returns per unit of risk. AroCell AB is currently generating about -0.25 per unit of risk. If you would invest 1,022 in Ford Motor on September 3, 2024 and sell it today you would earn a total of 91.00 from holding Ford Motor or generate 8.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Ford Motor vs. AroCell AB
Performance |
| Timeline |
| Ford Motor |
| AroCell AB |
Ford and AroCell AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and AroCell AB
The main advantage of trading using opposite Ford and AroCell AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, AroCell AB 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 AroCell AB will offset losses from the drop in AroCell AB's long position.| Ford vs. GreenPower Motor | Ford vs. ZEEKR Intelligent Technology | Ford vs. Volcon Inc | Ford vs. Ford Motor |
| AroCell AB vs. Smart Eye AB | AroCell AB vs. Genovis AB | AroCell AB vs. Kancera AB | AroCell AB vs. Zignsec AB |
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 Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |