Correlation Between Ford and Ageas SA/NV

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

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

Diversification Opportunities for Ford and Ageas SA/NV

-0.21

Correlation Coefficient

Ford  Ageas SA/NV

Very good diversification

The 3 months correlation between Ford and Ageas is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and ageas SANV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ageas SA/NV 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 Ageas SA/NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ageas SA/NV has no effect on the direction of Ford i.e., Ford and Ageas SA/NV go up and down completely randomly.

Pair Corralation between Ford and Ageas SA/NV

Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Ageas SA/NV. In addition to that, Ford is 1.46 times more volatile than ageas SANV. It trades about -0.09 of its total potential returns per unit of risk. ageas SANV is currently generating about 0.11 per unit of volatility. If you would invest  5,023  in ageas SANV on December 1, 2024 and sell it today you would earn a total of  388.00  from holding ageas SANV or generate 7.72% return on investment over 90 days.

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

Ford Motor  vs.  ageas SANV

Ford Motor

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ford Motor has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Ageas SA/NV

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ageas SANV are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Ageas SA/NV may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Ford and Ageas SA/NV

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

The idea behind Ford Motor and ageas SANV 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.