Correlation Between Ford and Exploitasi Energi
Can any of the company-specific risk be diversified away by investing in both Ford and Exploitasi Energi 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 Exploitasi Energi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Exploitasi Energi Indonesia, you can compare the effects of market volatilities on Ford and Exploitasi Energi 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 Exploitasi Energi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Exploitasi Energi.
Diversification Opportunities for Ford and Exploitasi Energi
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and Exploitasi is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Exploitasi Energi Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exploitasi Energi 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 Exploitasi Energi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exploitasi Energi has no effect on the direction of Ford i.e., Ford and Exploitasi Energi go up and down completely randomly.
Pair Corralation between Ford and Exploitasi Energi
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.25 times more return on investment than Exploitasi Energi. However, Ford Motor is 4.03 times less risky than Exploitasi Energi. It trades about 0.03 of its potential returns per unit of risk. Exploitasi Energi Indonesia is currently generating about -0.04 per unit of risk. If you would invest 990.00 in Ford Motor on August 25, 2024 and sell it today you would earn a total of 128.00 from holding Ford Motor or generate 12.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.4% |
| Values | Daily Returns |
Ford Motor vs. Exploitasi Energi Indonesia
Performance |
| Timeline |
| Ford Motor |
| Exploitasi Energi |
Ford and Exploitasi Energi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Exploitasi Energi
The main advantage of trading using opposite Ford and Exploitasi Energi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Exploitasi Energi 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 Exploitasi Energi will offset losses from the drop in Exploitasi Energi's long position.The idea behind Ford Motor and Exploitasi Energi Indonesia 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.| Exploitasi Energi vs. Petrosea Tbk | Exploitasi Energi vs. Harum Energy Tbk | Exploitasi Energi vs. Perdana Karya Perkasa | Exploitasi Energi vs. Samindo Resources Tbk |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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