Correlation Between Ford and Ampio Pharm

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

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

Diversification Opportunities for Ford and Ampio Pharm

0.27

Correlation Coefficient

Ford  Ampio Pharm

Modest diversification

The 3 months correlation between Ford and Ampio is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Ampio Pharm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ampio Pharm 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 Ampio Pharm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ampio Pharm has no effect on the direction of Ford i.e., Ford and Ampio Pharm go up and down completely randomly.

Pair Corralation between Ford and Ampio Pharm

If you would invest  24.00  in Ampio Pharm on October 11, 2024 and sell it today you would earn a total of  0.00  from holding Ampio Pharm or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	4.76%
Values	Daily Returns

Ford Motor  vs.  Ampio Pharm

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 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.

Ampio Pharm

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ampio Pharm has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Ampio Pharm is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Ford and Ampio Pharm

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

The idea behind Ford Motor and Ampio Pharm 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.

Check out your portfolio center.

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 Stocks Directory module to find actively traded stocks across global markets.