Correlation Between Ford and Asian Hotels
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By analyzing existing cross correlation between Ford Motor and Asian Hotels Limited, you can compare the effects of market volatilities on Ford and Asian Hotels 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 Asian Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Asian Hotels.
Diversification Opportunities for Ford and Asian Hotels
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ford and Asian is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Asian Hotels Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asian Hotels Limited 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 Asian Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asian Hotels Limited has no effect on the direction of Ford i.e., Ford and Asian Hotels go up and down completely randomly.
Pair Corralation between Ford and Asian Hotels
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Asian Hotels. But the stock apears to be less risky and, when comparing its historical volatility, Ford Motor is 1.23 times less risky than Asian Hotels. The stock trades about 0.0 of its potential returns per unit of risk. The Asian Hotels Limited is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 20,140 in Asian Hotels Limited on August 31, 2024 and sell it today you would lose (136.00) from holding Asian Hotels Limited or give up 0.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.4% |
| Values | Daily Returns |
Ford Motor vs. Asian Hotels Limited
Performance |
| Timeline |
| Ford Motor |
| Asian Hotels Limited |
Ford and Asian Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Asian Hotels
The main advantage of trading using opposite Ford and Asian Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Asian Hotels 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 Asian Hotels will offset losses from the drop in Asian Hotels' long position.The idea behind Ford Motor and Asian Hotels Limited 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.| Asian Hotels vs. PYRAMID TECHNOPLAST ORD | Asian Hotels vs. Palred Technologies Limited | Asian Hotels vs. FCS Software Solutions | Asian Hotels vs. 63 moons technologies |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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