Correlation Between Ford and Agile Content

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

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

Diversification Opportunities for Ford and Agile Content

0.48

Correlation Coefficient

Ford  Agile Content

Very weak diversification

The 3 months correlation between Ford and Agile is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Agile Content SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agile Content SA 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 Agile Content. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agile Content SA has no effect on the direction of Ford i.e., Ford and Agile Content go up and down completely randomly.

Pair Corralation between Ford and Agile Content

Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.65 times more return on investment than Agile Content. However, Ford Motor is 1.53 times less risky than Agile Content. It trades about 0.06 of its potential returns per unit of risk. Agile Content SA is currently generating about -0.04 per unit of risk. If you would invest  957.00  in Ford Motor on December 20, 2024 and sell it today you would earn a total of  60.00  from holding Ford Motor or generate 6.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.72%
Values	Daily Returns

Ford Motor  vs.  Agile Content SA

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.

Agile Content SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Agile Content SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Ford and Agile Content

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

The idea behind Ford Motor and Agile Content SA 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.