Correlation Between Ford and Sileon AB
Can any of the company-specific risk be diversified away by investing in both Ford and Sileon AB 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 Sileon AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Sileon AB, you can compare the effects of market volatilities on Ford and Sileon AB 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 Sileon AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Sileon AB.
Diversification Opportunities for Ford and Sileon AB
Average diversification
The 3 months correlation between Ford and Sileon is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Sileon AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sileon 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 Sileon AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sileon AB has no effect on the direction of Ford i.e., Ford and Sileon AB go up and down completely randomly.
Pair Corralation between Ford and Sileon AB
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.29 times more return on investment than Sileon AB. However, Ford Motor is 3.49 times less risky than Sileon AB. It trades about -0.5 of its potential returns per unit of risk. Sileon AB is currently generating about -0.49 per unit of risk. If you would invest 1,140 in Ford Motor on September 24, 2024 and sell it today you would lose (152.00) from holding Ford Motor or give up 13.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Ford Motor vs. Sileon AB
Performance |
| Timeline |
| Ford Motor |
| Sileon AB |
Ford and Sileon AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Sileon AB
The main advantage of trading using opposite Ford and Sileon AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Sileon AB 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 Sileon AB will offset losses from the drop in Sileon AB's long position.The idea behind Ford Motor and Sileon AB 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.| Sileon AB vs. Enersize Oy | Sileon AB vs. Divio Technologies AB | Sileon AB vs. Mekonomen AB | Sileon AB vs. Embellence 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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