Correlation Between Ford and HIGHTECH PAYMENT
Can any of the company-specific risk be diversified away by investing in both Ford and HIGHTECH PAYMENT 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 HIGHTECH PAYMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and HIGHTECH PAYMENT SYSTEMS, you can compare the effects of market volatilities on Ford and HIGHTECH PAYMENT 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 HIGHTECH PAYMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and HIGHTECH PAYMENT.
Diversification Opportunities for Ford and HIGHTECH PAYMENT
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and HIGHTECH is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and HIGHTECH PAYMENT SYSTEMS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HIGHTECH PAYMENT SYSTEMS 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 HIGHTECH PAYMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HIGHTECH PAYMENT SYSTEMS has no effect on the direction of Ford i.e., Ford and HIGHTECH PAYMENT go up and down completely randomly.
Pair Corralation between Ford and HIGHTECH PAYMENT
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.53 times more return on investment than HIGHTECH PAYMENT. However, Ford Motor is 1.89 times less risky than HIGHTECH PAYMENT. It trades about 0.01 of its potential returns per unit of risk. HIGHTECH PAYMENT SYSTEMS is currently generating about -0.05 per unit of risk. If you would invest 1,138 in Ford Motor on September 2, 2024 and sell it today you would lose (25.00) from holding Ford Motor or give up 2.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.39% |
| Values | Daily Returns |
Ford Motor vs. HIGHTECH PAYMENT SYSTEMS
Performance |
| Timeline |
| Ford Motor |
| HIGHTECH PAYMENT SYSTEMS |
Ford and HIGHTECH PAYMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and HIGHTECH PAYMENT
The main advantage of trading using opposite Ford and HIGHTECH PAYMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, HIGHTECH PAYMENT 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 HIGHTECH PAYMENT will offset losses from the drop in HIGHTECH PAYMENT's long position.The idea behind Ford Motor and HIGHTECH PAYMENT SYSTEMS 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.| HIGHTECH PAYMENT vs. MAGHREBAIL | HIGHTECH PAYMENT vs. MINIERE TOUISSIT | HIGHTECH PAYMENT vs. AFRIQUIA GAZ | HIGHTECH PAYMENT vs. AGMA LAHLOU TAZI |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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