Correlation Between Ford and Prodea Real
Can any of the company-specific risk be diversified away by investing in both Ford and Prodea Real 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 Prodea Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Prodea Real Estate, you can compare the effects of market volatilities on Ford and Prodea Real 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 Prodea Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Prodea Real.
Diversification Opportunities for Ford and Prodea Real
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and Prodea is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Prodea Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prodea Real Estate 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 Prodea Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prodea Real Estate has no effect on the direction of Ford i.e., Ford and Prodea Real go up and down completely randomly.
Pair Corralation between Ford and Prodea Real
Taking into account the 90-day investment horizon Ford Motor is expected to generate 1.01 times more return on investment than Prodea Real. However, Ford is 1.01 times more volatile than Prodea Real Estate. It trades about 0.01 of its potential returns per unit of risk. Prodea Real Estate is currently generating about -0.01 per unit of risk. If you would invest 1,123 in Ford Motor on September 4, 2024 and sell it today you would lose (25.00) from holding Ford Motor or give up 2.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 78.97% |
| Values | Daily Returns |
Ford Motor vs. Prodea Real Estate
Performance |
| Timeline |
| Ford Motor |
| Prodea Real Estate |
Ford and Prodea Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Prodea Real
The main advantage of trading using opposite Ford and Prodea Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Prodea Real 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 Prodea Real will offset losses from the drop in Prodea Real's long position.The idea behind Ford Motor and Prodea Real Estate 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.| Prodea Real vs. Hellenic Telecommunications Organization | Prodea Real vs. Profile Systems Software | Prodea Real vs. Optima bank SA | Prodea Real vs. As Commercial Industrial |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |