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

0.33

Correlation Coefficient

Ford  Ageas SA/NV

Weak diversification

The 3 months correlation between Ford and Ageas is 0.33. 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 is expected to generate 3.47 times less return on investment than Ageas SA/NV. In addition to that, Ford is 1.79 times more volatile than ageas SANV. It trades about 0.05 of its total potential returns per unit of risk. ageas SANV is currently generating about 0.34 per unit of volatility. If you would invest  4,883  in ageas SANV on December 26, 2024 and sell it today you would earn a total of  1,229  from holding ageas SANV or generate 25.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Ford Motor  vs.  ageas SANV

Ford Motor

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ford Motor are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating technical and fundamental indicators, Ford may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Ageas SA/NV

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ageas SANV are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Ageas SA/NV showed solid returns over the last few months and may actually be approaching a breakup point.

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 Money Managers module to screen money managers from public funds and ETFs managed around the world.