Correlation Between Ford and Jantsa Jant

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

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

Diversification Opportunities for Ford and Jantsa Jant

0.2

Correlation Coefficient

Ford  Jantsa Jant

Modest diversification

The 3 months correlation between Ford and Jantsa is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Jantsa Jant Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jantsa Jant Sanayi 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 Jantsa Jant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jantsa Jant Sanayi has no effect on the direction of Ford i.e., Ford and Jantsa Jant go up and down completely randomly.

Pair Corralation between Ford and Jantsa Jant

Taking into account the 90-day investment horizon Ford Motor is expected to generate 1.11 times more return on investment than Jantsa Jant. However, Ford is 1.11 times more volatile than Jantsa Jant Sanayi. It trades about 0.13 of its potential returns per unit of risk. Jantsa Jant Sanayi is currently generating about -0.1 per unit of risk. If you would invest  990.00  in Ford Motor on October 22, 2024 and sell it today you would earn a total of  28.00  from holding Ford Motor or generate 2.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	90.0%
Values	Daily Returns

Ford Motor  vs.  Jantsa Jant Sanayi

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.

Jantsa Jant Sanayi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jantsa Jant Sanayi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Ford and Jantsa Jant

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

The idea behind Ford Motor and Jantsa Jant Sanayi 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.