Correlation Between Ford and Generation Asia
Can any of the company-specific risk be diversified away by investing in both Ford and Generation Asia 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 Generation Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Generation Asia I, you can compare the effects of market volatilities on Ford and Generation Asia 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 Generation Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Generation Asia.
Diversification Opportunities for Ford and Generation Asia
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ford and Generation is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Generation Asia I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Generation Asia I 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 Generation Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Generation Asia I has no effect on the direction of Ford i.e., Ford and Generation Asia go up and down completely randomly.
Pair Corralation between Ford and Generation Asia
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Generation Asia. In addition to that, Ford is 10.93 times more volatile than Generation Asia I. It trades about 0.0 of its total potential returns per unit of risk. Generation Asia I is currently generating about 0.05 per unit of volatility. If you would invest 1,125 in Generation Asia I on September 3, 2024 and sell it today you would earn a total of 15.00 from holding Generation Asia I or generate 1.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 89.6% |
| Values | Daily Returns |
Ford Motor vs. Generation Asia I
Performance |
| Timeline |
| Ford Motor |
| Generation Asia I |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Ford and Generation Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Generation Asia
The main advantage of trading using opposite Ford and Generation Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Generation Asia 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 Generation Asia will offset losses from the drop in Generation Asia's long position.| Ford vs. GreenPower Motor | Ford vs. ZEEKR Intelligent Technology | Ford vs. Volcon Inc | Ford vs. Ford Motor |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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