Correlation Between Ford and Ingram Micro
Can any of the company-specific risk be diversified away by investing in both Ford and Ingram Micro 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 Ingram Micro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Ingram Micro Bilisim, you can compare the effects of market volatilities on Ford and Ingram Micro 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 Ingram Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Ingram Micro.
Diversification Opportunities for Ford and Ingram Micro
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ford and Ingram is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Ingram Micro Bilisim in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ingram Micro Bilisim 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 Ingram Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ingram Micro Bilisim has no effect on the direction of Ford i.e., Ford and Ingram Micro go up and down completely randomly.
Pair Corralation between Ford and Ingram Micro
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Ingram Micro. But the stock apears to be less risky and, when comparing its historical volatility, Ford Motor is 1.47 times less risky than Ingram Micro. The stock trades about -0.16 of its potential returns per unit of risk. The Ingram Micro Bilisim is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 42,200 in Ingram Micro Bilisim on October 7, 2024 and sell it today you would earn a total of 2,100 from holding Ingram Micro Bilisim or generate 4.98% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 95.35% |
Values | Daily Returns |
Ford Motor vs. Ingram Micro Bilisim
Performance |
Timeline |
Ford Motor |
Ingram Micro Bilisim |
Ford and Ingram Micro Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ford and Ingram Micro
The main advantage of trading using opposite Ford and Ingram Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Ingram Micro 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 Ingram Micro will offset losses from the drop in Ingram Micro's long position.The idea behind Ford Motor and Ingram Micro Bilisim 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.Ingram Micro vs. MEGA METAL | Ingram Micro vs. KOC METALURJI | Ingram Micro vs. Galatasaray Sportif Sinai | Ingram Micro vs. Akcansa Cimento Sanayi |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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