Correlation Between Ford and Hedef Holdings

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

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

Diversification Opportunities for Ford and Hedef Holdings

-0.36

Correlation Coefficient

Ford  Hedef Holdings

Very good diversification

The 3 months correlation between Ford and Hedef is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Hedef Holdings AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hedef Holdings 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 Hedef Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hedef Holdings AS has no effect on the direction of Ford i.e., Ford and Hedef Holdings go up and down completely randomly.

Pair Corralation between Ford and Hedef Holdings

Taking into account the 90-day investment horizon Ford is expected to generate 53.13 times less return on investment than Hedef Holdings. But when comparing it to its historical volatility, Ford Motor is 8.1 times less risky than Hedef Holdings. It trades about 0.01 of its potential returns per unit of risk. Hedef Holdings AS is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  346.00  in Hedef Holdings AS on September 30, 2024 and sell it today you would lose (30.00) from holding Hedef Holdings AS or give up 8.67% 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.  Hedef Holdings 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.

Hedef Holdings AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hedef Holdings AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Ford and Hedef Holdings

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

The idea behind Ford Motor and Hedef Holdings 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.