Correlation Between Ford and PT Gajah
Can any of the company-specific risk be diversified away by investing in both Ford and PT Gajah 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 PT Gajah into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and PT Gajah Tunggal, you can compare the effects of market volatilities on Ford and PT Gajah 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 PT Gajah. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and PT Gajah.
Diversification Opportunities for Ford and PT Gajah
Significant diversification
The 3 months correlation between Ford and GH8 is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and PT Gajah Tunggal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Gajah Tunggal 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 PT Gajah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Gajah Tunggal has no effect on the direction of Ford i.e., Ford and PT Gajah go up and down completely randomly.
Pair Corralation between Ford and PT Gajah
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.29 times more return on investment than PT Gajah. However, Ford Motor is 3.48 times less risky than PT Gajah. It trades about 0.01 of its potential returns per unit of risk. PT Gajah Tunggal is currently generating about 0.0 per unit of risk. If you would invest 967.00 in Ford Motor on December 16, 2024 and sell it today you would earn a total of 6.00 from holding Ford Motor or generate 0.62% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Ford Motor vs. PT Gajah Tunggal
Performance |
Timeline |
Ford Motor |
PT Gajah Tunggal |
Ford and PT Gajah Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ford and PT Gajah
The main advantage of trading using opposite Ford and PT Gajah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, PT Gajah 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 PT Gajah will offset losses from the drop in PT Gajah's long position.The idea behind Ford Motor and PT Gajah Tunggal 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.PT Gajah vs. Molson Coors Beverage | PT Gajah vs. Collins Foods Limited | PT Gajah vs. Suntory Beverage Food | PT Gajah vs. COFCO Joycome Foods |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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