Correlation Between Ford and Obour Land
Can any of the company-specific risk be diversified away by investing in both Ford and Obour Land 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 Obour Land into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Obour Land For, you can compare the effects of market volatilities on Ford and Obour Land 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 Obour Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Obour Land.
Diversification Opportunities for Ford and Obour Land
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ford and Obour is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Obour Land For in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Obour Land For 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 Obour Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Obour Land For has no effect on the direction of Ford i.e., Ford and Obour Land go up and down completely randomly.
Pair Corralation between Ford and Obour Land
Taking into account the 90-day investment horizon Ford is expected to generate 6.28 times less return on investment than Obour Land. But when comparing it to its historical volatility, Ford Motor is 1.51 times less risky than Obour Land. It trades about 0.02 of its potential returns per unit of risk. Obour Land For is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 757.00 in Obour Land For on September 12, 2024 and sell it today you would earn a total of 1,096 from holding Obour Land For or generate 144.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 77.98% |
| Values | Daily Returns |
Ford Motor vs. Obour Land For
Performance |
| Timeline |
| Ford Motor |
| Obour Land For |
Ford and Obour Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Obour Land
The main advantage of trading using opposite Ford and Obour Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Obour Land 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 Obour Land will offset losses from the drop in Obour Land's long position.The idea behind Ford Motor and Obour Land For 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.| Obour Land vs. Global Telecom Holding | Obour Land vs. ODIN Investments | Obour Land vs. Egyptian Iron Steel | Obour Land vs. Delta Construction Rebuilding |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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