Correlation Between Ford and Angel One

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

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

Diversification Opportunities for Ford and Angel One

-0.02

Correlation Coefficient

Ford  Angel One

Good diversification

The 3 months correlation between Ford and Angel is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Angel One Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Angel One Limited 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 Angel One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Angel One Limited has no effect on the direction of Ford i.e., Ford and Angel One go up and down completely randomly.

Pair Corralation between Ford and Angel One

Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.63 times more return on investment than Angel One. However, Ford Motor is 1.58 times less risky than Angel One. It trades about -0.11 of its potential returns per unit of risk. Angel One Limited is currently generating about -0.68 per unit of risk. If you would invest  999.00  in Ford Motor on October 15, 2024 and sell it today you would lose (28.00) from holding Ford Motor or give up 2.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

Ford Motor  vs.  Angel One Limited

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.

Angel One Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Angel One Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Ford and Angel One

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

The idea behind Ford Motor and Angel One Limited 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.