Correlation Between Ford and ATRESMEDIA
Can any of the company-specific risk be diversified away by investing in both Ford and ATRESMEDIA 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 ATRESMEDIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and ATRESMEDIA, you can compare the effects of market volatilities on Ford and ATRESMEDIA 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 ATRESMEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and ATRESMEDIA.
Diversification Opportunities for Ford and ATRESMEDIA
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ford and ATRESMEDIA is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and ATRESMEDIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATRESMEDIA 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 ATRESMEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATRESMEDIA has no effect on the direction of Ford i.e., Ford and ATRESMEDIA go up and down completely randomly.
Pair Corralation between Ford and ATRESMEDIA
Taking into account the 90-day investment horizon Ford Motor is expected to generate 3.14 times more return on investment than ATRESMEDIA. However, Ford is 3.14 times more volatile than ATRESMEDIA. It trades about 0.03 of its potential returns per unit of risk. ATRESMEDIA is currently generating about -0.03 per unit of risk. If you would invest 1,083 in Ford Motor on August 31, 2024 and sell it today you would earn a total of 27.00 from holding Ford Motor or generate 2.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Ford Motor vs. ATRESMEDIA
Performance |
| Timeline |
| Ford Motor |
| ATRESMEDIA |
Ford and ATRESMEDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and ATRESMEDIA
The main advantage of trading using opposite Ford and ATRESMEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, ATRESMEDIA 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 ATRESMEDIA will offset losses from the drop in ATRESMEDIA's long position.The idea behind Ford Motor and ATRESMEDIA 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.| ATRESMEDIA vs. ATOSS SOFTWARE | ATRESMEDIA vs. AM EAGLE OUTFITTERS | ATRESMEDIA vs. COMMERCIAL VEHICLE | ATRESMEDIA vs. Check Point Software |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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