Correlation Between Ford and AJ LUCAS
Can any of the company-specific risk be diversified away by investing in both Ford and AJ LUCAS 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 AJ LUCAS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and AJ LUCAS GROUP, you can compare the effects of market volatilities on Ford and AJ LUCAS 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 AJ LUCAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and AJ LUCAS.
Diversification Opportunities for Ford and AJ LUCAS
Very good diversification
The 3 months correlation between Ford and FW9 is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and AJ LUCAS GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AJ LUCAS GROUP 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 AJ LUCAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AJ LUCAS GROUP has no effect on the direction of Ford i.e., Ford and AJ LUCAS go up and down completely randomly.
Pair Corralation between Ford and AJ LUCAS
Taking into account the 90-day investment horizon Ford is expected to generate 51.97 times less return on investment than AJ LUCAS. But when comparing it to its historical volatility, Ford Motor is 9.41 times less risky than AJ LUCAS. It trades about 0.01 of its potential returns per unit of risk. AJ LUCAS GROUP is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2.30 in AJ LUCAS GROUP on September 3, 2024 and sell it today you would lose (2.25) from holding AJ LUCAS GROUP or give up 97.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.02% |
| Values | Daily Returns |
Ford Motor vs. AJ LUCAS GROUP
Performance |
| Timeline |
| Ford Motor |
| AJ LUCAS GROUP |
Ford and AJ LUCAS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and AJ LUCAS
The main advantage of trading using opposite Ford and AJ LUCAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, AJ LUCAS 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 AJ LUCAS will offset losses from the drop in AJ LUCAS's long position.| Ford vs. GreenPower Motor | Ford vs. ZEEKR Intelligent Technology | Ford vs. Volcon Inc | Ford vs. Ford Motor |
| AJ LUCAS vs. Gol Intelligent Airlines | AJ LUCAS vs. PUBLIC STORAGE PRFO | AJ LUCAS vs. DICKER DATA LTD | AJ LUCAS vs. DATAGROUP SE |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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