Correlation Between Ford and SES SA
Can any of the company-specific risk be diversified away by investing in both Ford and SES SA 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 SES SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and SES SA, you can compare the effects of market volatilities on Ford and SES SA 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 SES SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and SES SA.
Diversification Opportunities for Ford and SES SA
Very good diversification
The 3 months correlation between Ford and SES is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and SES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SES SA 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 SES SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SES SA has no effect on the direction of Ford i.e., Ford and SES SA go up and down completely randomly.
Pair Corralation between Ford and SES SA
Taking into account the 90-day investment horizon Ford Motor is expected to generate 1.1 times more return on investment than SES SA. However, Ford is 1.1 times more volatile than SES SA. It trades about -0.02 of its potential returns per unit of risk. SES SA is currently generating about -0.12 per unit of risk. If you would invest 1,287 in Ford Motor on September 3, 2024 and sell it today you would lose (174.00) from holding Ford Motor or give up 13.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.65% |
| Values | Daily Returns |
Ford Motor vs. SES SA
Performance |
| Timeline |
| Ford Motor |
| SES SA |
Ford and SES SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and SES SA
The main advantage of trading using opposite Ford and SES SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, SES SA 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 SES SA will offset losses from the drop in SES SA's long position.| Ford vs. GreenPower Motor | Ford vs. ZEEKR Intelligent Technology | Ford vs. Volcon Inc | Ford vs. Ford Motor |
| SES SA vs. News Corporation | SES SA vs. News Corporation | SES SA vs. Superior Plus Corp | SES SA vs. NMI Holdings |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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