Correlation Between Ford and Aambahl Gaynor

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

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

Diversification Opportunities for Ford and Aambahl Gaynor

0.52

Correlation Coefficient

Ford  Aambahl Gaynor

Very weak diversification

The 3 months correlation between Ford and Aambahl is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Aambahl Gaynor Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aambahl Gaynor Income 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 Aambahl Gaynor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aambahl Gaynor Income has no effect on the direction of Ford i.e., Ford and Aambahl Gaynor go up and down completely randomly.

Pair Corralation between Ford and Aambahl Gaynor

Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Aambahl Gaynor. In addition to that, Ford is 3.64 times more volatile than Aambahl Gaynor Income. It trades about -0.01 of its total potential returns per unit of risk. Aambahl Gaynor Income is currently generating about 0.12 per unit of volatility. If you would invest  2,238  in Aambahl Gaynor Income on September 17, 2024 and sell it today you would earn a total of  440.00  from holding Aambahl Gaynor Income or generate 19.66% return on investment over 90 days.

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

Ford Motor  vs.  Aambahl Gaynor Income

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.

Aambahl Gaynor Income

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aambahl Gaynor Income are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Aambahl Gaynor is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ford and Aambahl Gaynor

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

The idea behind Ford Motor and Aambahl Gaynor Income 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.