Correlation Between Ford and Bosch Fren
Can any of the company-specific risk be diversified away by investing in both Ford and Bosch Fren 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 Bosch Fren into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Bosch Fren Sistemleri, you can compare the effects of market volatilities on Ford and Bosch Fren 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 Bosch Fren. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Bosch Fren.
Diversification Opportunities for Ford and Bosch Fren
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ford and Bosch is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Bosch Fren Sistemleri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bosch Fren Sistemleri 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 Bosch Fren. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bosch Fren Sistemleri has no effect on the direction of Ford i.e., Ford and Bosch Fren go up and down completely randomly.
Pair Corralation between Ford and Bosch Fren
Taking into account the 90-day investment horizon Ford Motor is expected to generate 1.29 times more return on investment than Bosch Fren. However, Ford is 1.29 times more volatile than Bosch Fren Sistemleri. It trades about 0.0 of its potential returns per unit of risk. Bosch Fren Sistemleri is currently generating about -0.15 per unit of risk. If you would invest 1,022 in Ford Motor on November 2, 2024 and sell it today you would lose (6.00) from holding Ford Motor or give up 0.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 93.75% |
| Values | Daily Returns |
Ford Motor vs. Bosch Fren Sistemleri
Performance |
| Timeline |
| Ford Motor |
| Bosch Fren Sistemleri |
Ford and Bosch Fren Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Bosch Fren
The main advantage of trading using opposite Ford and Bosch Fren positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Bosch Fren 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 Bosch Fren will offset losses from the drop in Bosch Fren's long position.The idea behind Ford Motor and Bosch Fren Sistemleri 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.| Bosch Fren vs. MEGA METAL | Bosch Fren vs. Cuhadaroglu Metal Sanayi | Bosch Fren vs. Mackolik Internet Hizmetleri | Bosch Fren vs. Bms Birlesik Metal |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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