Correlation Between Ford and Hawesko Holding
Can any of the company-specific risk be diversified away by investing in both Ford and Hawesko Holding 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 Hawesko Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Hawesko Holding AG, you can compare the effects of market volatilities on Ford and Hawesko Holding 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 Hawesko Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Hawesko Holding.
Diversification Opportunities for Ford and Hawesko Holding
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and Hawesko is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Hawesko Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawesko Holding AG 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 Hawesko Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawesko Holding AG has no effect on the direction of Ford i.e., Ford and Hawesko Holding go up and down completely randomly.
Pair Corralation between Ford and Hawesko Holding
Taking into account the 90-day investment horizon Ford Motor is expected to generate 1.2 times more return on investment than Hawesko Holding. However, Ford is 1.2 times more volatile than Hawesko Holding AG. It trades about 0.0 of its potential returns per unit of risk. Hawesko Holding AG is currently generating about -0.04 per unit of risk. If you would invest 1,115 in Ford Motor on September 12, 2024 and sell it today you would lose (59.00) from holding Ford Motor or give up 5.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.8% |
| Values | Daily Returns |
Ford Motor vs. Hawesko Holding AG
Performance |
| Timeline |
| Ford Motor |
| Hawesko Holding AG |
Ford and Hawesko Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Hawesko Holding
The main advantage of trading using opposite Ford and Hawesko Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Hawesko Holding 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 Hawesko Holding will offset losses from the drop in Hawesko Holding's long position.The idea behind Ford Motor and Hawesko Holding AG 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.| Hawesko Holding vs. Diageo plc | Hawesko Holding vs. Thai Beverage Public | Hawesko Holding vs. Rmy Cointreau SA | Hawesko Holding vs. Treasury Wine Estates |
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 Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |