Correlation Between Ford and ICON PROPERTIES

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

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

Diversification Opportunities for Ford and ICON PROPERTIES

-0.76

Correlation Coefficient

Ford  ICON PROPERTIES

Pay attention - limited upside

The 3 months correlation between Ford and ICON is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and ICON PROPERTIES LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICON PROPERTIES 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 ICON PROPERTIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICON PROPERTIES has no effect on the direction of Ford i.e., Ford and ICON PROPERTIES go up and down completely randomly.

Pair Corralation between Ford and ICON PROPERTIES

Taking into account the 90-day investment horizon Ford is expected to generate 14.58 times less return on investment than ICON PROPERTIES. In addition to that, Ford is 1.49 times more volatile than ICON PROPERTIES LIMITED. It trades about 0.0 of its total potential returns per unit of risk. ICON PROPERTIES LIMITED is currently generating about 0.06 per unit of volatility. If you would invest  1,192  in ICON PROPERTIES LIMITED on October 27, 2024 and sell it today you would earn a total of  613.00  from holding ICON PROPERTIES LIMITED or generate 51.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.19%
Values	Daily Returns

Ford Motor  vs.  ICON PROPERTIES LIMITED

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.

ICON PROPERTIES

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ICON PROPERTIES LIMITED are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, ICON PROPERTIES unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ford and ICON PROPERTIES

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

The idea behind Ford Motor and ICON PROPERTIES LIMITED 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.