Correlation Between Ford and Zinzino AB
Can any of the company-specific risk be diversified away by investing in both Ford and Zinzino AB 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 Zinzino AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Zinzino AB, you can compare the effects of market volatilities on Ford and Zinzino AB 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 Zinzino AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Zinzino AB.
Diversification Opportunities for Ford and Zinzino AB
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ford and Zinzino is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Zinzino AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zinzino AB 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 Zinzino AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zinzino AB has no effect on the direction of Ford i.e., Ford and Zinzino AB go up and down completely randomly.
Pair Corralation between Ford and Zinzino AB
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.69 times more return on investment than Zinzino AB. However, Ford Motor is 1.46 times less risky than Zinzino AB. It trades about 0.23 of its potential returns per unit of risk. Zinzino AB is currently generating about -0.16 per unit of risk. If you would invest 1,015 in Ford Motor on September 1, 2024 and sell it today you would earn a total of 98.00 from holding Ford Motor or generate 9.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ford Motor vs. Zinzino AB
Performance |
| Timeline |
| Ford Motor |
| Zinzino AB |
Ford and Zinzino AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Zinzino AB
The main advantage of trading using opposite Ford and Zinzino AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Zinzino AB 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 Zinzino AB will offset losses from the drop in Zinzino AB's long position.The idea behind Ford Motor and Zinzino 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.| Zinzino AB vs. Legacy Education | Zinzino AB vs. Apple Inc | Zinzino AB vs. NVIDIA | Zinzino AB vs. Microsoft |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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