Correlation Between Ford and Meta Epsi
Can any of the company-specific risk be diversified away by investing in both Ford and Meta Epsi 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 Meta Epsi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Meta Epsi Tbk, you can compare the effects of market volatilities on Ford and Meta Epsi 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 Meta Epsi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Meta Epsi.
Diversification Opportunities for Ford and Meta Epsi
Very good diversification
The 3 months correlation between Ford and Meta is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Meta Epsi Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Epsi Tbk 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 Meta Epsi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meta Epsi Tbk has no effect on the direction of Ford i.e., Ford and Meta Epsi go up and down completely randomly.
Pair Corralation between Ford and Meta Epsi
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.31 times more return on investment than Meta Epsi. However, Ford Motor is 3.21 times less risky than Meta Epsi. It trades about 0.02 of its potential returns per unit of risk. Meta Epsi Tbk is currently generating about -0.02 per unit of risk. If you would invest 1,035 in Ford Motor on September 4, 2024 and sell it today you would earn a total of 63.00 from holding Ford Motor or generate 6.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 93.93% |
| Values | Daily Returns |
Ford Motor vs. Meta Epsi Tbk
Performance |
| Timeline |
| Ford Motor |
| Meta Epsi Tbk |
Ford and Meta Epsi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Meta Epsi
The main advantage of trading using opposite Ford and Meta Epsi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Meta Epsi 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 Meta Epsi will offset losses from the drop in Meta Epsi's long position.The idea behind Ford Motor and Meta Epsi Tbk 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.| Meta Epsi vs. PT Hetzer Medical | Meta Epsi vs. PT Dewi Shri | Meta Epsi vs. PT Sari Kreasi | Meta Epsi vs. Gaya Abadi Sempurna |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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