Correlation Between Ford and Mowi ASA
Can any of the company-specific risk be diversified away by investing in both Ford and Mowi ASA 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 Mowi ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Mowi ASA ADR, you can compare the effects of market volatilities on Ford and Mowi ASA 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 Mowi ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Mowi ASA.
Diversification Opportunities for Ford and Mowi ASA
Very weak diversification
The 3 months correlation between Ford and Mowi is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Mowi ASA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mowi ASA ADR 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 Mowi ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mowi ASA ADR has no effect on the direction of Ford i.e., Ford and Mowi ASA go up and down completely randomly.
Pair Corralation between Ford and Mowi ASA
If you would invest 1,143 in Ford Motor on August 28, 2024 and sell it today you would lose (3.00) from holding Ford Motor or give up 0.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.79% |
| Values | Daily Returns |
Ford Motor vs. Mowi ASA ADR
Performance |
| Timeline |
| Ford Motor |
| Mowi ASA ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ford and Mowi ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Mowi ASA
The main advantage of trading using opposite Ford and Mowi ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Mowi ASA 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 Mowi ASA will offset losses from the drop in Mowi ASA's long position.The idea behind Ford Motor and Mowi ASA ADR 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.| Mowi ASA vs. Compagnie Generale des | Mowi ASA vs. Adecco Group | Mowi ASA vs. Sandvik AB ADR | Mowi ASA vs. Central Japan Railway |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |