Correlation Between Ford and Samhi Hotels
Can any of the company-specific risk be diversified away by investing in both Ford and Samhi Hotels 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 Samhi Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Samhi Hotels Limited, you can compare the effects of market volatilities on Ford and Samhi Hotels 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 Samhi Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Samhi Hotels.
Diversification Opportunities for Ford and Samhi Hotels
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and Samhi is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Samhi Hotels Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samhi Hotels Limited 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 Samhi Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samhi Hotels Limited has no effect on the direction of Ford i.e., Ford and Samhi Hotels go up and down completely randomly.
Pair Corralation between Ford and Samhi Hotels
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Samhi Hotels. In addition to that, Ford is 1.37 times more volatile than Samhi Hotels Limited. It trades about 0.0 of its total potential returns per unit of risk. Samhi Hotels Limited is currently generating about 0.04 per unit of volatility. If you would invest 18,442 in Samhi Hotels Limited on August 28, 2024 and sell it today you would earn a total of 201.00 from holding Samhi Hotels Limited or generate 1.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ford Motor vs. Samhi Hotels Limited
Performance |
| Timeline |
| Ford Motor |
| Samhi Hotels Limited |
Ford and Samhi Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Samhi Hotels
The main advantage of trading using opposite Ford and Samhi Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Samhi Hotels 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 Samhi Hotels will offset losses from the drop in Samhi Hotels' long position.The idea behind Ford Motor and Samhi Hotels Limited 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.| Samhi Hotels vs. MMTC Limited | Samhi Hotels vs. Kingfa Science Technology | Samhi Hotels vs. Rico Auto Industries | Samhi Hotels vs. GACM Technologies Limited |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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