Correlation Between Ford and Nava Nakorn
Can any of the company-specific risk be diversified away by investing in both Ford and Nava Nakorn 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 Nava Nakorn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Nava Nakorn Public, you can compare the effects of market volatilities on Ford and Nava Nakorn 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 Nava Nakorn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Nava Nakorn.
Diversification Opportunities for Ford and Nava Nakorn
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and Nava is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Nava Nakorn Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nava Nakorn Public 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 Nava Nakorn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nava Nakorn Public has no effect on the direction of Ford i.e., Ford and Nava Nakorn go up and down completely randomly.
Pair Corralation between Ford and Nava Nakorn
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Nava Nakorn. In addition to that, Ford is 1.33 times more volatile than Nava Nakorn Public. It trades about -0.19 of its total potential returns per unit of risk. Nava Nakorn Public is currently generating about -0.09 per unit of volatility. If you would invest 175.00 in Nava Nakorn Public on September 14, 2024 and sell it today you would lose (4.00) from holding Nava Nakorn Public or give up 2.29% 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. Nava Nakorn Public
Performance |
| Timeline |
| Ford Motor |
| Nava Nakorn Public |
Ford and Nava Nakorn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Nava Nakorn
The main advantage of trading using opposite Ford and Nava Nakorn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Nava Nakorn 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 Nava Nakorn will offset losses from the drop in Nava Nakorn's long position.The idea behind Ford Motor and Nava Nakorn Public 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.| Nava Nakorn vs. NC Housing Public | Nava Nakorn vs. LPN Development Public | Nava Nakorn vs. Property Perfect Public | Nava Nakorn vs. Lalin Property Public |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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