Correlation Between Ford and Grupo Supervielle
Can any of the company-specific risk be diversified away by investing in both Ford and Grupo Supervielle 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 Grupo Supervielle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Grupo Supervielle SA, you can compare the effects of market volatilities on Ford and Grupo Supervielle 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 Grupo Supervielle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Grupo Supervielle.
Diversification Opportunities for Ford and Grupo Supervielle
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and Grupo is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Grupo Supervielle SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Supervielle 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 Grupo Supervielle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Supervielle has no effect on the direction of Ford i.e., Ford and Grupo Supervielle go up and down completely randomly.
Pair Corralation between Ford and Grupo Supervielle
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Grupo Supervielle. But the stock apears to be less risky and, when comparing its historical volatility, Ford Motor is 3.38 times less risky than Grupo Supervielle. The stock trades about -0.42 of its potential returns per unit of risk. The Grupo Supervielle SA is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 242,000 in Grupo Supervielle SA on September 25, 2024 and sell it today you would earn a total of 128,000 from holding Grupo Supervielle SA or generate 52.89% 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. Grupo Supervielle SA
Performance |
| Timeline |
| Ford Motor |
| Grupo Supervielle |
Ford and Grupo Supervielle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Grupo Supervielle
The main advantage of trading using opposite Ford and Grupo Supervielle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Grupo Supervielle 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 Grupo Supervielle will offset losses from the drop in Grupo Supervielle's long position.The idea behind Ford Motor and Grupo Supervielle SA 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.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 CEOs Directory module to screen CEOs from public companies around the world.
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