Correlation Between Ford and Powszechny Zaklad
Can any of the company-specific risk be diversified away by investing in both Ford and Powszechny Zaklad 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 Powszechny Zaklad into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Powszechny Zaklad Ubezpieczen, you can compare the effects of market volatilities on Ford and Powszechny Zaklad 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 Powszechny Zaklad. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Powszechny Zaklad.
Diversification Opportunities for Ford and Powszechny Zaklad
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ford and Powszechny is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Powszechny Zaklad Ubezpieczen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powszechny Zaklad 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 Powszechny Zaklad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Powszechny Zaklad has no effect on the direction of Ford i.e., Ford and Powszechny Zaklad go up and down completely randomly.
Pair Corralation between Ford and Powszechny Zaklad
Taking into account the 90-day investment horizon Ford Motor is expected to generate 1.01 times more return on investment than Powszechny Zaklad. However, Ford is 1.01 times more volatile than Powszechny Zaklad Ubezpieczen. It trades about 0.03 of its potential returns per unit of risk. Powszechny Zaklad Ubezpieczen is currently generating about 0.02 per unit of risk. If you would invest 1,083 in Ford Motor on September 2, 2024 and sell it today you would earn a total of 30.00 from holding Ford Motor or generate 2.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Powszechny Zaklad Ubezpieczen
Performance |
| Timeline |
| Ford Motor |
| Powszechny Zaklad |
Ford and Powszechny Zaklad Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Powszechny Zaklad
The main advantage of trading using opposite Ford and Powszechny Zaklad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Powszechny Zaklad 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 Powszechny Zaklad will offset losses from the drop in Powszechny Zaklad's long position.The idea behind Ford Motor and Powszechny Zaklad Ubezpieczen 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.| Powszechny Zaklad vs. Live Motion Games | Powszechny Zaklad vs. Echo Investment SA | Powszechny Zaklad vs. Alior Bank SA | Powszechny Zaklad vs. Tower Investments SA |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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