Correlation Between Ford and Ampol
Can any of the company-specific risk be diversified away by investing in both Ford and Ampol 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 Ampol into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Ampol Ltd ADR, you can compare the effects of market volatilities on Ford and Ampol 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 Ampol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Ampol.
Diversification Opportunities for Ford and Ampol
Very good diversification
The 3 months correlation between Ford and Ampol is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Ampol Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ampol Ltd ADR 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 Ampol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ampol Ltd ADR has no effect on the direction of Ford i.e., Ford and Ampol go up and down completely randomly.
Pair Corralation between Ford and Ampol
Taking into account the 90-day investment horizon Ford is expected to generate 1.51 times less return on investment than Ampol. In addition to that, Ford is 1.52 times more volatile than Ampol Ltd ADR. It trades about 0.01 of its total potential returns per unit of risk. Ampol Ltd ADR is currently generating about 0.02 per unit of volatility. If you would invest 3,502 in Ampol Ltd ADR on September 3, 2024 and sell it today you would earn a total of 285.00 from holding Ampol Ltd ADR or generate 8.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Ampol Ltd ADR
Performance |
| Timeline |
| Ford Motor |
| Ampol Ltd ADR |
Ford and Ampol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Ampol
The main advantage of trading using opposite Ford and Ampol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Ampol 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 Ampol will offset losses from the drop in Ampol's long position.| Ford vs. GreenPower Motor | Ford vs. ZEEKR Intelligent Technology | Ford vs. Volcon Inc | Ford vs. Ford Motor |
| Ampol vs. Ultrapar Participacoes SA | Ampol vs. Sunoco LP | Ampol vs. HF Sinclair Corp | Ampol vs. Delek Energy |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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