Correlation Between Ford and Raute Oyj
Can any of the company-specific risk be diversified away by investing in both Ford and Raute Oyj 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 Raute Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Raute Oyj, you can compare the effects of market volatilities on Ford and Raute Oyj 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 Raute Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Raute Oyj.
Diversification Opportunities for Ford and Raute Oyj
Pay attention - limited upside
The 3 months correlation between Ford and Raute is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Raute Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raute 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 Raute Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raute Oyj has no effect on the direction of Ford i.e., Ford and Raute Oyj go up and down completely randomly.
Pair Corralation between Ford and Raute Oyj
If you would invest (100.00) in Raute Oyj on January 10, 2025 and sell it today you would earn a total of 100.00 from holding Raute Oyj or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Ford Motor vs. Raute Oyj
Performance |
| Timeline |
| Ford Motor |
| Raute Oyj |
Risk-Adjusted Performance
Weak
Weak | Strong |
Ford and Raute Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Raute Oyj
The main advantage of trading using opposite Ford and Raute Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Raute Oyj 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 Raute Oyj will offset losses from the drop in Raute Oyj's long position.The idea behind Ford Motor and Raute 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.| Raute Oyj vs. Ponsse Oyj 1 | Raute Oyj vs. Lassila Tikanoja Oyj | Raute Oyj vs. Tokmanni Group Oyj | Raute Oyj vs. CapMan Oyj B |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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