Correlation Between Ford and Investis Holding
Can any of the company-specific risk be diversified away by investing in both Ford and Investis 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 Investis 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 Investis Holding SA, you can compare the effects of market volatilities on Ford and Investis 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 Investis Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Investis Holding.
Diversification Opportunities for Ford and Investis Holding
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ford and Investis is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Investis Holding SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investis Holding 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 Investis Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investis Holding has no effect on the direction of Ford i.e., Ford and Investis Holding go up and down completely randomly.
Pair Corralation between Ford and Investis Holding
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Investis Holding. In addition to that, Ford is 3.91 times more volatile than Investis Holding SA. It trades about -0.02 of its total potential returns per unit of risk. Investis Holding SA is currently generating about 0.12 per unit of volatility. If you would invest 9,750 in Investis Holding SA on September 3, 2024 and sell it today you would earn a total of 1,200 from holding Investis Holding SA or generate 12.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.4% |
| Values | Daily Returns |
Ford Motor vs. Investis Holding SA
Performance |
| Timeline |
| Ford Motor |
| Investis Holding |
Ford and Investis Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Investis Holding
The main advantage of trading using opposite Ford and Investis Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Investis 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 Investis Holding will offset losses from the drop in Investis Holding's long position.| Ford vs. GreenPower Motor | Ford vs. ZEEKR Intelligent Technology | Ford vs. Volcon Inc | Ford vs. Ford Motor |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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