Correlation Between Ford and Calida Holding
Can any of the company-specific risk be diversified away by investing in both Ford and Calida 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 Calida 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 Calida Holding AG, you can compare the effects of market volatilities on Ford and Calida 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 Calida Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Calida Holding.
Diversification Opportunities for Ford and Calida Holding
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and Calida is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Calida Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calida Holding AG 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 Calida Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calida Holding AG has no effect on the direction of Ford i.e., Ford and Calida Holding go up and down completely randomly.
Pair Corralation between Ford and Calida Holding
Taking into account the 90-day investment horizon Ford Motor is expected to generate 1.18 times more return on investment than Calida Holding. However, Ford is 1.18 times more volatile than Calida Holding AG. It trades about 0.18 of its potential returns per unit of risk. Calida Holding AG is currently generating about -0.2 per unit of risk. If you would invest 1,022 in Ford Motor on September 4, 2024 and sell it today you would earn a total of 76.00 from holding Ford Motor or generate 7.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ford Motor vs. Calida Holding AG
Performance |
| Timeline |
| Ford Motor |
| Calida Holding AG |
Ford and Calida Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Calida Holding
The main advantage of trading using opposite Ford and Calida Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Calida 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 Calida Holding will offset losses from the drop in Calida Holding's long position.The idea behind Ford Motor and Calida Holding AG 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.| Calida Holding vs. Swatch Group AG | Calida Holding vs. Helvetia Holding AG | Calida Holding vs. Emmi AG | Calida Holding vs. Swissquote Group Holding |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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