Correlation Between Ford and Can2 Termik

Can any of the company-specific risk be diversified away by investing in both Ford and Can2 Termik 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 Can2 Termik into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ford Motor and Can2 Termik AS, you can compare the effects of market volatilities on Ford and Can2 Termik 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 Can2 Termik. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Can2 Termik.

Diversification Opportunities for Ford and Can2 Termik

-0.52

Correlation Coefficient

Ford  Can2 Termik

Excellent diversification

The 3 months correlation between Ford and Can2 is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Can2 Termik AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Can2 Termik AS 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 Can2 Termik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Can2 Termik AS has no effect on the direction of Ford i.e., Ford and Can2 Termik go up and down completely randomly.

Pair Corralation between Ford and Can2 Termik

Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Can2 Termik. But the stock apears to be less risky and, when comparing its historical volatility, Ford Motor is 1.34 times less risky than Can2 Termik. The stock trades about -0.23 of its potential returns per unit of risk. The Can2 Termik AS is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  171.00  in Can2 Termik AS on October 8, 2024 and sell it today you would lose (1.00) from holding Can2 Termik AS or give up 0.58% of portfolio value over 90 days.

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

Ford Motor  vs.  Can2 Termik AS

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 nearly stable technical and fundamental indicators, Ford is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Can2 Termik AS

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Can2 Termik AS are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Can2 Termik demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ford and Can2 Termik

The main advantage of trading using opposite Ford and Can2 Termik positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Can2 Termik 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 Can2 Termik will offset losses from the drop in Can2 Termik's long position.

The idea behind Ford Motor and Can2 Termik AS 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.