Correlation Between Ford and Synektik
Can any of the company-specific risk be diversified away by investing in both Ford and Synektik 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 Synektik into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Synektik SA, you can compare the effects of market volatilities on Ford and Synektik 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 Synektik. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Synektik.
Diversification Opportunities for Ford and Synektik
Good diversification
The 3 months correlation between Ford and Synektik is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Synektik SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synektik 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 Synektik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synektik SA has no effect on the direction of Ford i.e., Ford and Synektik go up and down completely randomly.
Pair Corralation between Ford and Synektik
Taking into account the 90-day investment horizon Ford is expected to generate 18.45 times less return on investment than Synektik. But when comparing it to its historical volatility, Ford Motor is 1.24 times less risky than Synektik. It trades about 0.01 of its potential returns per unit of risk. Synektik SA is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3,189 in Synektik SA on September 3, 2024 and sell it today you would earn a total of 14,211 from holding Synektik SA or generate 445.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Synektik SA
Performance |
| Timeline |
| Ford Motor |
| Synektik SA |
Ford and Synektik Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Synektik
The main advantage of trading using opposite Ford and Synektik positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Synektik 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 Synektik will offset losses from the drop in Synektik's long position.| Ford vs. GreenPower Motor | Ford vs. ZEEKR Intelligent Technology | Ford vs. Volcon Inc | Ford vs. Ford Motor |
| Synektik vs. Banco Santander SA | Synektik vs. UniCredit SpA | Synektik vs. CEZ as | Synektik vs. Polski Koncern Naftowy |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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