Correlation Between Ford and Kontrol Technologies
Can any of the company-specific risk be diversified away by investing in both Ford and Kontrol Technologies 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 Kontrol Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Kontrol Technologies Corp, you can compare the effects of market volatilities on Ford and Kontrol Technologies 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 Kontrol Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Kontrol Technologies.
Diversification Opportunities for Ford and Kontrol Technologies
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ford and Kontrol is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Kontrol Technologies Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kontrol Technologies Corp 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 Kontrol Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kontrol Technologies Corp has no effect on the direction of Ford i.e., Ford and Kontrol Technologies go up and down completely randomly.
Pair Corralation between Ford and Kontrol Technologies
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.37 times more return on investment than Kontrol Technologies. However, Ford Motor is 2.71 times less risky than Kontrol Technologies. It trades about 0.0 of its potential returns per unit of risk. Kontrol Technologies Corp is currently generating about 0.0 per unit of risk. If you would invest 1,169 in Ford Motor on September 2, 2024 and sell it today you would lose (56.00) from holding Ford Motor or give up 4.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Kontrol Technologies Corp
Performance |
| Timeline |
| Ford Motor |
| Kontrol Technologies Corp |
Ford and Kontrol Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Kontrol Technologies
The main advantage of trading using opposite Ford and Kontrol Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Kontrol Technologies 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 Kontrol Technologies will offset losses from the drop in Kontrol Technologies' long position.The idea behind Ford Motor and Kontrol Technologies Corp 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.| Kontrol Technologies vs. SEATech Ventures Corp | Kontrol Technologies vs. Xalles Holdings | Kontrol Technologies vs. GBT Technologies | Kontrol Technologies vs. Quisitive Technology Solutions |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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