Correlation Between Ford and INFICON Holding
Can any of the company-specific risk be diversified away by investing in both Ford and INFICON 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 INFICON 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 INFICON Holding AG, you can compare the effects of market volatilities on Ford and INFICON 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 INFICON Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and INFICON Holding.
Diversification Opportunities for Ford and INFICON Holding
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ford and INFICON is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and INFICON Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INFICON 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 INFICON Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INFICON Holding AG has no effect on the direction of Ford i.e., Ford and INFICON Holding go up and down completely randomly.
Pair Corralation between Ford and INFICON Holding
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.25 times more return on investment than INFICON Holding. However, Ford Motor is 4.06 times less risky than INFICON Holding. It trades about -0.18 of its potential returns per unit of risk. INFICON Holding AG is currently generating about -0.21 per unit of risk. If you would invest 1,110 in Ford Motor on September 13, 2024 and sell it today you would lose (69.00) from holding Ford Motor or give up 6.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ford Motor vs. INFICON Holding AG
Performance |
| Timeline |
| Ford Motor |
| INFICON Holding AG |
Ford and INFICON Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and INFICON Holding
The main advantage of trading using opposite Ford and INFICON Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, INFICON 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 INFICON Holding will offset losses from the drop in INFICON Holding's long position.The idea behind Ford Motor and INFICON 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.| INFICON Holding vs. Copa Holdings SA | INFICON Holding vs. United Airlines Holdings | INFICON Holding vs. Delta Air Lines | INFICON Holding vs. SkyWest |
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.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |