Correlation Between Ford and PKP Cargo
Can any of the company-specific risk be diversified away by investing in both Ford and PKP Cargo 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 PKP Cargo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and PKP Cargo SA, you can compare the effects of market volatilities on Ford and PKP Cargo 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 PKP Cargo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and PKP Cargo.
Diversification Opportunities for Ford and PKP Cargo
Very good diversification
The 3 months correlation between Ford and PKP is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and PKP Cargo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PKP Cargo SA 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 PKP Cargo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PKP Cargo SA has no effect on the direction of Ford i.e., Ford and PKP Cargo go up and down completely randomly.
Pair Corralation between Ford and PKP Cargo
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.82 times more return on investment than PKP Cargo. However, Ford Motor is 1.22 times less risky than PKP Cargo. It trades about 0.01 of its potential returns per unit of risk. PKP Cargo SA is currently generating about 0.0 per unit of risk. If you would invest 1,148 in Ford Motor on September 3, 2024 and sell it today you would lose (35.00) from holding Ford Motor or give up 3.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. PKP Cargo SA
Performance |
| Timeline |
| Ford Motor |
| PKP Cargo SA |
Ford and PKP Cargo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and PKP Cargo
The main advantage of trading using opposite Ford and PKP Cargo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, PKP Cargo 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 PKP Cargo will offset losses from the drop in PKP Cargo's long position.| Ford vs. GreenPower Motor | Ford vs. ZEEKR Intelligent Technology | Ford vs. Volcon Inc | Ford vs. Ford Motor |
| PKP Cargo vs. Banco Santander SA | PKP Cargo vs. UniCredit SpA | PKP Cargo vs. CEZ as | PKP Cargo vs. Polski Koncern Naftowy |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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