Correlation Between Ford and Aclarion

Can any of the company-specific risk be diversified away by investing in both Ford and Aclarion 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 Aclarion into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ford Motor and Aclarion, you can compare the effects of market volatilities on Ford and Aclarion 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 Aclarion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Aclarion.

Diversification Opportunities for Ford and Aclarion

-0.07

Correlation Coefficient

Ford  Aclarion

Good diversification

The 3 months correlation between Ford and Aclarion is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Aclarion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aclarion 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 Aclarion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aclarion has no effect on the direction of Ford i.e., Ford and Aclarion go up and down completely randomly.

Pair Corralation between Ford and Aclarion

Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Aclarion. But the stock apears to be less risky and, when comparing its historical volatility, Ford Motor is 46.43 times less risky than Aclarion. The stock trades about 0.0 of its potential returns per unit of risk. The Aclarion is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  13.00  in Aclarion on August 31, 2024 and sell it today you would lose (9.10) from holding Aclarion or give up 70.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	79.95%
Values	Daily Returns

Ford Motor  vs.  Aclarion

Ford Motor

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ford Motor are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.

Aclarion

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aclarion are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Aclarion showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ford and Aclarion

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

The idea behind Ford Motor and Aclarion 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.