Correlation Between Ford and Vivendi SE
Can any of the company-specific risk be diversified away by investing in both Ford and Vivendi SE 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 Vivendi SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Vivendi SE, you can compare the effects of market volatilities on Ford and Vivendi SE 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 Vivendi SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Vivendi SE.
Diversification Opportunities for Ford and Vivendi SE
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and Vivendi is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Vivendi SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivendi SE 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 Vivendi SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivendi SE has no effect on the direction of Ford i.e., Ford and Vivendi SE go up and down completely randomly.
Pair Corralation between Ford and Vivendi SE
Taking into account the 90-day investment horizon Ford Motor is expected to generate 1.76 times more return on investment than Vivendi SE. However, Ford is 1.76 times more volatile than Vivendi SE. It trades about 0.01 of its potential returns per unit of risk. Vivendi SE is currently generating about 0.01 per unit of risk. If you would invest 1,148 in Ford Motor on September 3, 2024 and sell it today you would lose (50.00) from holding Ford Motor or give up 4.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.02% |
| Values | Daily Returns |
Ford Motor vs. Vivendi SE
Performance |
| Timeline |
| Ford Motor |
| Vivendi SE |
Ford and Vivendi SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Vivendi SE
The main advantage of trading using opposite Ford and Vivendi SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Vivendi SE 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 Vivendi SE will offset losses from the drop in Vivendi SE's long position.| Ford vs. GreenPower Motor | Ford vs. ZEEKR Intelligent Technology | Ford vs. Volcon Inc | Ford vs. Ford Motor |
| Vivendi SE vs. Sumitomo Rubber Industries | Vivendi SE vs. RCM TECHNOLOGIES | Vivendi SE vs. THRACE PLASTICS | Vivendi SE vs. GOODYEAR T RUBBER |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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