Correlation Between Ford and SenzaGen
Can any of the company-specific risk be diversified away by investing in both Ford and SenzaGen 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 SenzaGen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and SenzaGen AB, you can compare the effects of market volatilities on Ford and SenzaGen 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 SenzaGen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and SenzaGen.
Diversification Opportunities for Ford and SenzaGen
Very good diversification
The 3 months correlation between Ford and SenzaGen is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and SenzaGen AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SenzaGen AB 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 SenzaGen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SenzaGen AB has no effect on the direction of Ford i.e., Ford and SenzaGen go up and down completely randomly.
Pair Corralation between Ford and SenzaGen
Taking into account the 90-day investment horizon Ford Motor is expected to generate 1.17 times more return on investment than SenzaGen. However, Ford is 1.17 times more volatile than SenzaGen AB. It trades about 0.22 of its potential returns per unit of risk. SenzaGen AB is currently generating about -0.13 per unit of risk. If you would invest 1,022 in Ford Motor on September 3, 2024 and sell it today you would earn a total of 91.00 from holding Ford Motor or generate 8.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Ford Motor vs. SenzaGen AB
Performance |
| Timeline |
| Ford Motor |
| SenzaGen AB |
Ford and SenzaGen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and SenzaGen
The main advantage of trading using opposite Ford and SenzaGen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, SenzaGen 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 SenzaGen will offset losses from the drop in SenzaGen's long position.| Ford vs. GreenPower Motor | Ford vs. ZEEKR Intelligent Technology | Ford vs. Volcon Inc | Ford vs. Ford Motor |
| SenzaGen vs. Simris Alg AB | SenzaGen vs. Immunovia publ AB | SenzaGen vs. Sedana Medical AB | SenzaGen vs. KABE Group AB |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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