Correlation Between Ford and Aspira Womens

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

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

Diversification Opportunities for Ford and Aspira Womens

-0.06

Correlation Coefficient

Ford  Aspira Womens

Good diversification

The 3 months correlation between Ford and Aspira is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Aspira Womens Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aspira Womens Health 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 Aspira Womens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aspira Womens Health has no effect on the direction of Ford i.e., Ford and Aspira Womens go up and down completely randomly.

Pair Corralation between Ford and Aspira Womens

Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.36 times more return on investment than Aspira Womens. However, Ford Motor is 2.74 times less risky than Aspira Womens. It trades about -0.01 of its potential returns per unit of risk. Aspira Womens Health is currently generating about -0.06 per unit of risk. If you would invest  1,173  in Ford Motor on September 3, 2024 and sell it today you would lose (75.00) from holding Ford Motor or give up 6.39% of portfolio value over 90 days.

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

Ford Motor  vs.  Aspira Womens Health

Ford Motor

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ford Motor are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Ford is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Aspira Womens Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aspira Womens Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Aspira Womens is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Ford and Aspira Womens

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

The idea behind Ford Motor and Aspira Womens Health 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.