Correlation Between Ford and IClick Interactive

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

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

Diversification Opportunities for Ford and IClick Interactive

-0.75

Correlation Coefficient

Ford  IClick Interactive

Pay attention - limited upside

The 3 months correlation between Ford and IClick is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and iClick Interactive Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iClick Interactive Asia 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 IClick Interactive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iClick Interactive Asia has no effect on the direction of Ford i.e., Ford and IClick Interactive go up and down completely randomly.

Pair Corralation between Ford and IClick Interactive

Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the IClick Interactive. But the stock apears to be less risky and, when comparing its historical volatility, Ford Motor is 4.03 times less risky than IClick Interactive. The stock trades about -0.05 of its potential returns per unit of risk. The iClick Interactive Asia is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  320.00  in iClick Interactive Asia on October 25, 2024 and sell it today you would earn a total of  535.50  from holding iClick Interactive Asia or generate 167.34% return on investment over 90 days.

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

Ford Motor  vs.  iClick Interactive Asia

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.

iClick Interactive Asia

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iClick Interactive Asia are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile essential indicators, IClick Interactive disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ford and IClick Interactive

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

The idea behind Ford Motor and iClick Interactive Asia 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.