Correlation Between Ford and AXA SA

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

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

Diversification Opportunities for Ford and AXA SA

-0.03

Correlation Coefficient

Ford  AXA SA

Good diversification

The 3 months correlation between Ford and AXA is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and AXA SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXA 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 AXA SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXA SA has no effect on the direction of Ford i.e., Ford and AXA SA go up and down completely randomly.

Pair Corralation between Ford and AXA SA

Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the AXA SA. In addition to that, Ford is 2.37 times more volatile than AXA SA. It trades about -0.04 of its total potential returns per unit of risk. AXA SA is currently generating about 0.07 per unit of volatility. If you would invest  3,078  in AXA SA on September 23, 2024 and sell it today you would earn a total of  273.00  from holding AXA SA or generate 8.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.69%
Values	Daily Returns

Ford Motor  vs.  AXA SA

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.

AXA SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AXA SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Ford and AXA SA

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

The idea behind Ford Motor and AXA 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.