Correlation Between Ford and Telia Company
Can any of the company-specific risk be diversified away by investing in both Ford and Telia Company 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 Telia Company into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Telia Company AB, you can compare the effects of market volatilities on Ford and Telia Company 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 Telia Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Telia Company.
Diversification Opportunities for Ford and Telia Company
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ford and Telia is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Telia Company AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telia Company 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 Telia Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telia Company has no effect on the direction of Ford i.e., Ford and Telia Company go up and down completely randomly.
Pair Corralation between Ford and Telia Company
If you would invest 1,109 in Ford Motor on August 25, 2024 and sell it today you would earn a total of 9.00 from holding Ford Motor or generate 0.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Ford Motor vs. Telia Company AB
Performance |
| Timeline |
| Ford Motor |
| Telia Company |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ford and Telia Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Telia Company
The main advantage of trading using opposite Ford and Telia Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Telia Company 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 Telia Company will offset losses from the drop in Telia Company's long position.The idea behind Ford Motor and Telia Company 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.| Telia Company vs. MTN Group Ltd | Telia Company vs. Vodacom Group Ltd | Telia Company vs. Telenor ASA ADR | Telia Company vs. WideOpenWest |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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