Correlation Between Ford and Azelis Group
Can any of the company-specific risk be diversified away by investing in both Ford and Azelis Group 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 Azelis Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Azelis Group NV, you can compare the effects of market volatilities on Ford and Azelis Group 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 Azelis Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Azelis Group.
Diversification Opportunities for Ford and Azelis Group
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ford and Azelis is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Azelis Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azelis Group NV 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 Azelis Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Azelis Group NV has no effect on the direction of Ford i.e., Ford and Azelis Group go up and down completely randomly.
Pair Corralation between Ford and Azelis Group
Taking into account the 90-day investment horizon Ford Motor is expected to generate 1.13 times more return on investment than Azelis Group. However, Ford is 1.13 times more volatile than Azelis Group NV. It trades about 0.03 of its potential returns per unit of risk. Azelis Group NV is currently generating about 0.0 per unit of risk. If you would invest 969.00 in Ford Motor on August 24, 2024 and sell it today you would earn a total of 111.00 from holding Ford Motor or generate 11.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.81% |
| Values | Daily Returns |
Ford Motor vs. Azelis Group NV
Performance |
| Timeline |
| Ford Motor |
| Azelis Group NV |
Ford and Azelis Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Azelis Group
The main advantage of trading using opposite Ford and Azelis Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Azelis Group 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 Azelis Group will offset losses from the drop in Azelis Group's long position.The idea behind Ford Motor and Azelis Group NV 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.| Azelis Group vs. IMCD NV | Azelis Group vs. DIeteren Group SA | Azelis Group vs. DEME Group NV | Azelis Group vs. NV Bekaert SA |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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