Correlation Between Ford and Hubersuhner
Can any of the company-specific risk be diversified away by investing in both Ford and Hubersuhner 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 Hubersuhner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Hubersuhner AG, you can compare the effects of market volatilities on Ford and Hubersuhner 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 Hubersuhner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Hubersuhner.
Diversification Opportunities for Ford and Hubersuhner
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and Hubersuhner is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Hubersuhner AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubersuhner 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 Hubersuhner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubersuhner AG has no effect on the direction of Ford i.e., Ford and Hubersuhner go up and down completely randomly.
Pair Corralation between Ford and Hubersuhner
Taking into account the 90-day investment horizon Ford is expected to generate 1.13 times less return on investment than Hubersuhner. In addition to that, Ford is 1.55 times more volatile than Hubersuhner AG. It trades about 0.03 of its total potential returns per unit of risk. Hubersuhner AG is currently generating about 0.05 per unit of volatility. If you would invest 6,290 in Hubersuhner AG on August 29, 2024 and sell it today you would earn a total of 1,160 from holding Hubersuhner AG or generate 18.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Ford Motor vs. Hubersuhner AG
Performance |
| Timeline |
| Ford Motor |
| Hubersuhner AG |
Ford and Hubersuhner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Hubersuhner
The main advantage of trading using opposite Ford and Hubersuhner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Hubersuhner 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 Hubersuhner will offset losses from the drop in Hubersuhner's long position.The idea behind Ford Motor and Hubersuhner 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.| Hubersuhner vs. Bucher Industries AG | Hubersuhner vs. Komax Holding AG | Hubersuhner vs. Comet Holding AG | Hubersuhner vs. Burckhardt Compression |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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