Correlation Between Ford and Bank Ganesha
Can any of the company-specific risk be diversified away by investing in both Ford and Bank Ganesha 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 Bank Ganesha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Bank Ganesha Tbk, you can compare the effects of market volatilities on Ford and Bank Ganesha 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 Bank Ganesha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Bank Ganesha.
Diversification Opportunities for Ford and Bank Ganesha
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ford and Bank is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Bank Ganesha Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Ganesha Tbk 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 Bank Ganesha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Ganesha Tbk has no effect on the direction of Ford i.e., Ford and Bank Ganesha go up and down completely randomly.
Pair Corralation between Ford and Bank Ganesha
Taking into account the 90-day investment horizon Ford Motor is expected to generate 1.32 times more return on investment than Bank Ganesha. However, Ford is 1.32 times more volatile than Bank Ganesha Tbk. It trades about 0.03 of its potential returns per unit of risk. Bank Ganesha Tbk is currently generating about -0.1 per unit of risk. If you would invest 1,109 in Ford Motor on August 25, 2024 and sell it today you would earn a total of 9.00 from holding Ford Motor or generate 0.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Bank Ganesha Tbk
Performance |
| Timeline |
| Ford Motor |
| Bank Ganesha Tbk |
Ford and Bank Ganesha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Bank Ganesha
The main advantage of trading using opposite Ford and Bank Ganesha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Bank Ganesha 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 Bank Ganesha will offset losses from the drop in Bank Ganesha's long position.The idea behind Ford Motor and Bank Ganesha Tbk 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.| Bank Ganesha vs. Bk Harda Internasional | Bank Ganesha vs. Bank Yudha Bhakti | Bank Ganesha vs. Bank Mnc Internasional | Bank Ganesha vs. Bank Capital Indonesia |
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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