Correlation Between Ford and Tifico Fiber
Can any of the company-specific risk be diversified away by investing in both Ford and Tifico Fiber 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 Tifico Fiber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Tifico Fiber Indonesia, you can compare the effects of market volatilities on Ford and Tifico Fiber 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 Tifico Fiber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Tifico Fiber.
Diversification Opportunities for Ford and Tifico Fiber
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ford and Tifico is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Tifico Fiber Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tifico Fiber Indonesia 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 Tifico Fiber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tifico Fiber Indonesia has no effect on the direction of Ford i.e., Ford and Tifico Fiber go up and down completely randomly.
Pair Corralation between Ford and Tifico Fiber
If you would invest 1,027 in Ford Motor on August 30, 2024 and sell it today you would earn a total of 83.00 from holding Ford Motor or generate 8.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Tifico Fiber Indonesia
Performance |
| Timeline |
| Ford Motor |
| Tifico Fiber Indonesia |
Ford and Tifico Fiber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Tifico Fiber
The main advantage of trading using opposite Ford and Tifico Fiber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Tifico Fiber 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 Tifico Fiber will offset losses from the drop in Tifico Fiber's long position.The idea behind Ford Motor and Tifico Fiber Indonesia 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.| Tifico Fiber vs. Sunson Textile Manufacturer | Tifico Fiber vs. Voksel Electric Tbk | Tifico Fiber vs. Ricky Putra Globalindo | Tifico Fiber vs. Supreme Cable Manufacturing |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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