Correlation Between Ford and Ktima Kostas
Can any of the company-specific risk be diversified away by investing in both Ford and Ktima Kostas 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 Ktima Kostas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Ktima Kostas Lazaridis, you can compare the effects of market volatilities on Ford and Ktima Kostas 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 Ktima Kostas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Ktima Kostas.
Diversification Opportunities for Ford and Ktima Kostas
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and Ktima is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Ktima Kostas Lazaridis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ktima Kostas Lazaridis 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 Ktima Kostas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ktima Kostas Lazaridis has no effect on the direction of Ford i.e., Ford and Ktima Kostas go up and down completely randomly.
Pair Corralation between Ford and Ktima Kostas
Taking into account the 90-day investment horizon Ford Motor is expected to generate 1.1 times more return on investment than Ktima Kostas. However, Ford is 1.1 times more volatile than Ktima Kostas Lazaridis. It trades about 0.01 of its potential returns per unit of risk. Ktima Kostas Lazaridis is currently generating about 0.0 per unit of risk. If you would invest 1,119 in Ford Motor on September 3, 2024 and sell it today you would lose (6.00) from holding Ford Motor or give up 0.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.68% |
| Values | Daily Returns |
Ford Motor vs. Ktima Kostas Lazaridis
Performance |
| Timeline |
| Ford Motor |
| Ktima Kostas Lazaridis |
Ford and Ktima Kostas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Ktima Kostas
The main advantage of trading using opposite Ford and Ktima Kostas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Ktima Kostas 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 Ktima Kostas will offset losses from the drop in Ktima Kostas' long position.The idea behind Ford Motor and Ktima Kostas Lazaridis 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.| Ktima Kostas vs. Lampsa Hellenic Hotels | Ktima Kostas vs. Thrace Plastics Holding | Ktima Kostas vs. Aegean Airlines SA | Ktima Kostas vs. CPI Computer Peripherals |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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