Correlation Between Ford and Azimut Holding
Can any of the company-specific risk be diversified away by investing in both Ford and Azimut Holding 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 Azimut Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Azimut Holding SpA, you can compare the effects of market volatilities on Ford and Azimut Holding 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 Azimut Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Azimut Holding.
Diversification Opportunities for Ford and Azimut Holding
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ford and Azimut is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Azimut Holding SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azimut Holding 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 Azimut Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Azimut Holding SpA has no effect on the direction of Ford i.e., Ford and Azimut Holding go up and down completely randomly.
Pair Corralation between Ford and Azimut Holding
If you would invest 965.00 in Ford Motor on November 3, 2024 and sell it today you would earn a total of 43.00 from holding Ford Motor or generate 4.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Ford Motor vs. Azimut Holding SpA
Performance |
| Timeline |
| Ford Motor |
| Azimut Holding SpA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ford and Azimut Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Azimut Holding
The main advantage of trading using opposite Ford and Azimut Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Azimut Holding 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 Azimut Holding will offset losses from the drop in Azimut Holding's long position.The idea behind Ford Motor and Azimut Holding SpA 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.| Azimut Holding vs. Ameritrans Capital Corp | Azimut Holding vs. Bounce Mobile Systems | Azimut Holding vs. Elysee Development Corp | Azimut Holding vs. AGF Management Limited |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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