Correlation Between Ford and Gesundheitswelt Chiemgau
Can any of the company-specific risk be diversified away by investing in both Ford and Gesundheitswelt Chiemgau 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 Gesundheitswelt Chiemgau into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Gesundheitswelt Chiemgau AG, you can compare the effects of market volatilities on Ford and Gesundheitswelt Chiemgau 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 Gesundheitswelt Chiemgau. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Gesundheitswelt Chiemgau.
Diversification Opportunities for Ford and Gesundheitswelt Chiemgau
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and Gesundheitswelt is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Gesundheitswelt Chiemgau AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gesundheitswelt Chiemgau 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 Gesundheitswelt Chiemgau. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gesundheitswelt Chiemgau has no effect on the direction of Ford i.e., Ford and Gesundheitswelt Chiemgau go up and down completely randomly.
Pair Corralation between Ford and Gesundheitswelt Chiemgau
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Gesundheitswelt Chiemgau. In addition to that, Ford is 1.94 times more volatile than Gesundheitswelt Chiemgau AG. It trades about -0.18 of its total potential returns per unit of risk. Gesundheitswelt Chiemgau AG is currently generating about 0.09 per unit of volatility. If you would invest 1,220 in Gesundheitswelt Chiemgau AG on September 13, 2024 and sell it today you would earn a total of 20.00 from holding Gesundheitswelt Chiemgau AG or generate 1.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ford Motor vs. Gesundheitswelt Chiemgau AG
Performance |
| Timeline |
| Ford Motor |
| Gesundheitswelt Chiemgau |
Ford and Gesundheitswelt Chiemgau Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Gesundheitswelt Chiemgau
The main advantage of trading using opposite Ford and Gesundheitswelt Chiemgau positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Gesundheitswelt Chiemgau 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 Gesundheitswelt Chiemgau will offset losses from the drop in Gesundheitswelt Chiemgau's long position.The idea behind Ford Motor and Gesundheitswelt Chiemgau 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.| Gesundheitswelt Chiemgau vs. Service International | Gesundheitswelt Chiemgau vs. Bright Horizons Family | Gesundheitswelt Chiemgau vs. BOYD GROUP SERVICES | Gesundheitswelt Chiemgau vs. Frontdoor |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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