Correlation Between Ford and Surya Permata
Can any of the company-specific risk be diversified away by investing in both Ford and Surya Permata 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 Surya Permata into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Surya Permata Andalan, you can compare the effects of market volatilities on Ford and Surya Permata 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 Surya Permata. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Surya Permata.
Diversification Opportunities for Ford and Surya Permata
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and Surya is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Surya Permata Andalan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surya Permata Andalan 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 Surya Permata. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surya Permata Andalan has no effect on the direction of Ford i.e., Ford and Surya Permata go up and down completely randomly.
Pair Corralation between Ford and Surya Permata
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.56 times more return on investment than Surya Permata. However, Ford Motor is 1.8 times less risky than Surya Permata. It trades about 0.01 of its potential returns per unit of risk. Surya Permata Andalan is currently generating about -0.04 per unit of risk. If you would invest 1,090 in Ford Motor on October 21, 2024 and sell it today you would lose (72.00) from holding Ford Motor or give up 6.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.96% |
| Values | Daily Returns |
Ford Motor vs. Surya Permata Andalan
Performance |
| Timeline |
| Ford Motor |
| Surya Permata Andalan |
Ford and Surya Permata Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Surya Permata
The main advantage of trading using opposite Ford and Surya Permata positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Surya Permata 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 Surya Permata will offset losses from the drop in Surya Permata's long position.The idea behind Ford Motor and Surya Permata Andalan 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.| Surya Permata vs. Bintang Oto Global | Surya Permata vs. Metro Healthcare Indonesia | Surya Permata vs. Bhakti Multi Artha | Surya Permata vs. MNC Vision Networks |
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 CEOs Directory module to screen CEOs from public companies around the world.
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