Correlation Between Ford and Qt Group
Can any of the company-specific risk be diversified away by investing in both Ford and Qt Group 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 Qt Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Qt Group Oyj, you can compare the effects of market volatilities on Ford and Qt Group 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 Qt Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Qt Group.
Diversification Opportunities for Ford and Qt Group
Average diversification
The 3 months correlation between Ford and QTCOM is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Qt Group Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qt Group Oyj 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 Qt Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qt Group Oyj has no effect on the direction of Ford i.e., Ford and Qt Group go up and down completely randomly.
Pair Corralation between Ford and Qt Group
Taking into account the 90-day investment horizon Ford is expected to generate 3.41 times less return on investment than Qt Group. But when comparing it to its historical volatility, Ford Motor is 2.11 times less risky than Qt Group. It trades about 0.21 of its potential returns per unit of risk. Qt Group Oyj is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 6,675 in Qt Group Oyj on October 23, 2024 and sell it today you would earn a total of 995.00 from holding Qt Group Oyj or generate 14.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 78.95% |
| Values | Daily Returns |
Ford Motor vs. Qt Group Oyj
Performance |
| Timeline |
| Ford Motor |
| Qt Group Oyj |
Ford and Qt Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Qt Group
The main advantage of trading using opposite Ford and Qt Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Qt Group 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 Qt Group will offset losses from the drop in Qt Group's long position.The idea behind Ford Motor and Qt Group Oyj 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.| Qt Group vs. Harvia Oyj | Qt Group vs. Sampo Oyj A | Qt Group vs. Revenio Group | Qt Group vs. Kamux Suomi Oy |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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