Correlation Between Ford and Givaudan
Can any of the company-specific risk be diversified away by investing in both Ford and Givaudan 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 Givaudan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Givaudan SA, you can compare the effects of market volatilities on Ford and Givaudan 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 Givaudan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Givaudan.
Diversification Opportunities for Ford and Givaudan
Pay attention - limited upside
The 3 months correlation between Ford and Givaudan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Givaudan SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Givaudan SA 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 Givaudan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Givaudan SA has no effect on the direction of Ford i.e., Ford and Givaudan go up and down completely randomly.
Pair Corralation between Ford and Givaudan
If you would invest 1,102 in Ford Motor on September 12, 2024 and sell it today you would lose (61.50) from holding Ford Motor or give up 5.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Ford Motor vs. Givaudan SA
Performance |
| Timeline |
| Ford Motor |
| Givaudan SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ford and Givaudan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Givaudan
The main advantage of trading using opposite Ford and Givaudan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Givaudan 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 Givaudan will offset losses from the drop in Givaudan's long position.The idea behind Ford Motor and Givaudan SA 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.| Givaudan vs. MagnaChip Semiconductor Corp | Givaudan vs. ADRIATIC METALS LS 013355 | Givaudan vs. CN MODERN DAIRY | Givaudan vs. Taiwan Semiconductor Manufacturing |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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