Correlation Between Ford and Immunic

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

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

Diversification Opportunities for Ford and Immunic

0.35

Correlation Coefficient

Ford  Immunic

Weak diversification

The 3 months correlation between Ford and Immunic is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Immunic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immunic 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 Immunic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immunic has no effect on the direction of Ford i.e., Ford and Immunic go up and down completely randomly.

Pair Corralation between Ford and Immunic

Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Immunic. But the stock apears to be less risky and, when comparing its historical volatility, Ford Motor is 1.82 times less risky than Immunic. The stock trades about -0.06 of its potential returns per unit of risk. The Immunic is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  125.00  in Immunic on October 7, 2024 and sell it today you would lose (15.00) from holding Immunic or give up 12.0% of portfolio value over 90 days.

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

Ford Motor  vs.  Immunic

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.

Immunic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Immunic has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Ford and Immunic

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

The idea behind Ford Motor and Immunic 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.