Correlation Between Ford and Grard Perrier
Can any of the company-specific risk be diversified away by investing in both Ford and Grard Perrier 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 Grard Perrier into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Grard Perrier Industrie, you can compare the effects of market volatilities on Ford and Grard Perrier 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 Grard Perrier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Grard Perrier.
Diversification Opportunities for Ford and Grard Perrier
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ford and Grard is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Grard Perrier Industrie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grard Perrier Industrie 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 Grard Perrier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grard Perrier Industrie has no effect on the direction of Ford i.e., Ford and Grard Perrier go up and down completely randomly.
Pair Corralation between Ford and Grard Perrier
Taking into account the 90-day investment horizon Ford Motor is expected to generate 2.27 times more return on investment than Grard Perrier. However, Ford is 2.27 times more volatile than Grard Perrier Industrie. It trades about 0.05 of its potential returns per unit of risk. Grard Perrier Industrie is currently generating about -0.01 per unit of risk. If you would invest 1,091 in Ford Motor on August 24, 2024 and sell it today you would earn a total of 27.00 from holding Ford Motor or generate 2.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Grard Perrier Industrie
Performance |
| Timeline |
| Ford Motor |
| Grard Perrier Industrie |
Ford and Grard Perrier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Grard Perrier
The main advantage of trading using opposite Ford and Grard Perrier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Grard Perrier 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 Grard Perrier will offset losses from the drop in Grard Perrier's long position.The idea behind Ford Motor and Grard Perrier Industrie 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.| Grard Perrier vs. Novatech Industries SA | Grard Perrier vs. Manitou BF SA | Grard Perrier vs. Ossiam Minimum Variance | Grard Perrier vs. Granite 3x LVMH |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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