Correlation Between Ford and ASTRA GRAPHIA

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

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

Diversification Opportunities for Ford and ASTRA GRAPHIA

-0.12

Correlation Coefficient

Ford  ASTRA GRAPHIA

Good diversification

The 3 months correlation between Ford and ASTRA is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and ASTRA GRAPHIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASTRA GRAPHIA 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 ASTRA GRAPHIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASTRA GRAPHIA has no effect on the direction of Ford i.e., Ford and ASTRA GRAPHIA go up and down completely randomly.

Pair Corralation between Ford and ASTRA GRAPHIA

Taking into account the 90-day investment horizon Ford is expected to generate 24.95 times less return on investment than ASTRA GRAPHIA. But when comparing it to its historical volatility, Ford Motor is 11.61 times less risky than ASTRA GRAPHIA. It trades about 0.06 of its potential returns per unit of risk. ASTRA GRAPHIA is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  4.00  in ASTRA GRAPHIA on December 18, 2024 and sell it today you would earn a total of  1.60  from holding ASTRA GRAPHIA or generate 40.0% return on investment over 90 days.

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

Ford Motor  vs.  ASTRA GRAPHIA

Ford Motor

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ford Motor are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating technical and fundamental indicators, Ford may actually be approaching a critical reversion point that can send shares even higher in April 2025.

ASTRA GRAPHIA

Risk-Adjusted Performance

OK

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

Pair Trading with Ford and ASTRA GRAPHIA

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

The idea behind Ford Motor and ASTRA GRAPHIA 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.