Correlation Between Ford and Huddly AS
Can any of the company-specific risk be diversified away by investing in both Ford and Huddly AS 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 Huddly AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Huddly AS, you can compare the effects of market volatilities on Ford and Huddly AS 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 Huddly AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Huddly AS.
Diversification Opportunities for Ford and Huddly AS
Good diversification
The 3 months correlation between Ford and Huddly is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Huddly AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huddly AS 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 Huddly AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huddly AS has no effect on the direction of Ford i.e., Ford and Huddly AS go up and down completely randomly.
Pair Corralation between Ford and Huddly AS
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.32 times more return on investment than Huddly AS. However, Ford Motor is 3.14 times less risky than Huddly AS. It trades about 0.0 of its potential returns per unit of risk. Huddly AS is currently generating about -0.03 per unit of risk. 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 | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.7% |
| Values | Daily Returns |
Ford Motor vs. Huddly AS
Performance |
| Timeline |
| Ford Motor |
| Huddly AS |
Ford and Huddly AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Huddly AS
The main advantage of trading using opposite Ford and Huddly AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Huddly AS 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 Huddly AS will offset losses from the drop in Huddly AS's long position.The idea behind Ford Motor and Huddly AS 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.| Huddly AS vs. Pexip Holding ASA | Huddly AS vs. Airthings ASA | Huddly AS vs. Aker Horizons AS | Huddly AS vs. Cambi ASA |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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