Correlation Between Ford and Acadia Realty
Can any of the company-specific risk be diversified away by investing in both Ford and Acadia Realty 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 Acadia Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Acadia Realty Trust, you can compare the effects of market volatilities on Ford and Acadia Realty 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 Acadia Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Acadia Realty.
Diversification Opportunities for Ford and Acadia Realty
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ford and Acadia is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Acadia Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acadia Realty Trust 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 Acadia Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acadia Realty Trust has no effect on the direction of Ford i.e., Ford and Acadia Realty go up and down completely randomly.
Pair Corralation between Ford and Acadia Realty
Taking into account the 90-day investment horizon Ford Motor is expected to generate 1.05 times more return on investment than Acadia Realty. However, Ford is 1.05 times more volatile than Acadia Realty Trust. It trades about 0.08 of its potential returns per unit of risk. Acadia Realty Trust is currently generating about -0.04 per unit of risk. If you would invest 992.00 in Ford Motor on November 7, 2024 and sell it today you would earn a total of 24.00 from holding Ford Motor or generate 2.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Ford Motor vs. Acadia Realty Trust
Performance |
| Timeline |
| Ford Motor |
| Acadia Realty Trust |
Ford and Acadia Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Acadia Realty
The main advantage of trading using opposite Ford and Acadia Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Acadia Realty 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 Acadia Realty will offset losses from the drop in Acadia Realty's long position.The idea behind Ford Motor and Acadia Realty Trust 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.| Acadia Realty vs. BROADWIND ENRGY | Acadia Realty vs. SPARTAN STORES | Acadia Realty vs. Fukuyama Transporting Co | Acadia Realty vs. COPLAND ROAD CAPITAL |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |