Correlation Between Ford and PT Century
Can any of the company-specific risk be diversified away by investing in both Ford and PT Century 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 PT Century into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and PT Century Textile, you can compare the effects of market volatilities on Ford and PT Century 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 PT Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and PT Century.
Diversification Opportunities for Ford and PT Century
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ford and CNTX is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and PT Century Textile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Century Textile 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 PT Century. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Century Textile has no effect on the direction of Ford i.e., Ford and PT Century go up and down completely randomly.
Pair Corralation between Ford and PT Century
If you would invest 1,096 in Ford Motor on August 29, 2024 and sell it today you would earn a total of 14.00 from holding Ford Motor or generate 1.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. PT Century Textile
Performance |
| Timeline |
| Ford Motor |
| PT Century Textile |
Ford and PT Century Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and PT Century
The main advantage of trading using opposite Ford and PT Century positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, PT Century 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 PT Century will offset losses from the drop in PT Century's long position.The idea behind Ford Motor and PT Century Textile 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.| PT Century vs. Eratex Djaja Tbk | PT Century vs. Ever Shine Textile | PT Century vs. Argo Pantes Tbk | PT Century vs. Primarindo Asia Infrastructure |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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