Correlation Between Ford and Atos SE

Can any of the company-specific risk be diversified away by investing in both Ford and Atos 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 Atos 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 Atos SE, you can compare the effects of market volatilities on Ford and Atos 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 Atos SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Atos SE.

Diversification Opportunities for Ford and Atos SE

0.47

Correlation Coefficient

Ford  Atos SE

Very weak diversification

The 3 months correlation between Ford and Atos is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Atos SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atos 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 Atos SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atos SE has no effect on the direction of Ford i.e., Ford and Atos SE go up and down completely randomly.

Pair Corralation between Ford and Atos SE

Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.04 times more return on investment than Atos SE. However, Ford Motor is 27.05 times less risky than Atos SE. It trades about -0.32 of its potential returns per unit of risk. Atos SE is currently generating about -0.15 per unit of risk. If you would invest  1,110  in Ford Motor on September 27, 2024 and sell it today you would lose (103.00) from holding Ford Motor or give up 9.28% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Ford Motor  vs.  Atos SE

Ford Motor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ford Motor has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Ford is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Atos SE

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Atos SE are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Atos SE unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ford and Atos SE

The main advantage of trading using opposite Ford and Atos SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Atos 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 Atos SE will offset losses from the drop in Atos SE's long position.

The idea behind Ford Motor and Atos SE 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.

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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.