Correlation Between Ford and Atlantic Power
Can any of the company-specific risk be diversified away by investing in both Ford and Atlantic Power 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 Atlantic Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Atlantic Power, you can compare the effects of market volatilities on Ford and Atlantic Power 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 Atlantic Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Atlantic Power.
Diversification Opportunities for Ford and Atlantic Power
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ford and Atlantic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Atlantic Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlantic Power 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 Atlantic Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlantic Power has no effect on the direction of Ford i.e., Ford and Atlantic Power go up and down completely randomly.
Pair Corralation between Ford and Atlantic Power
If you would invest 0.00 in Atlantic Power on December 1, 2024 and sell it today you would earn a total of 0.00 from holding Atlantic Power or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Ford Motor vs. Atlantic Power
Performance |
| Timeline |
| Ford Motor |
| Atlantic Power |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Ford and Atlantic Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Atlantic Power
The main advantage of trading using opposite Ford and Atlantic Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Atlantic Power 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 Atlantic Power will offset losses from the drop in Atlantic Power's long position.The idea behind Ford Motor and Atlantic Power 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.| Atlantic Power vs. Globex Mining Enterprises | Atlantic Power vs. Titan Mining Corp | Atlantic Power vs. HPQ Silicon Resources | Atlantic Power vs. Aya Gold Silver |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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