Correlation Between Ford and Aesler Grup
Can any of the company-specific risk be diversified away by investing in both Ford and Aesler Grup 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 Aesler Grup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Aesler Grup Internasional, you can compare the effects of market volatilities on Ford and Aesler Grup 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 Aesler Grup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Aesler Grup.
Diversification Opportunities for Ford and Aesler Grup
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ford and Aesler is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Aesler Grup Internasional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aesler Grup Internasional 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 Aesler Grup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aesler Grup Internasional has no effect on the direction of Ford i.e., Ford and Aesler Grup go up and down completely randomly.
Pair Corralation between Ford and Aesler Grup
Taking into account the 90-day investment horizon Ford is expected to generate 31.72 times less return on investment than Aesler Grup. But when comparing it to its historical volatility, Ford Motor is 2.79 times less risky than Aesler Grup. It trades about 0.0 of its potential returns per unit of risk. Aesler Grup Internasional is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 72,000 in Aesler Grup Internasional on September 12, 2024 and sell it today you would earn a total of 28,500 from holding Aesler Grup Internasional or generate 39.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 96.07% |
| Values | Daily Returns |
Ford Motor vs. Aesler Grup Internasional
Performance |
| Timeline |
| Ford Motor |
| Aesler Grup Internasional |
Ford and Aesler Grup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Aesler Grup
The main advantage of trading using opposite Ford and Aesler Grup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Aesler Grup 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 Aesler Grup will offset losses from the drop in Aesler Grup's long position.The idea behind Ford Motor and Aesler Grup Internasional 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.| Aesler Grup vs. Siloam International Hospitals | Aesler Grup vs. Hoffmen Cleanindo | Aesler Grup vs. First Media Tbk | Aesler Grup vs. City Retail Developments |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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