Correlation Between Ford and Jayant Agro

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

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

Diversification Opportunities for Ford and Jayant Agro

-0.45

Correlation Coefficient

Ford  Jayant Agro

Very good diversification

The 3 months correlation between Ford and Jayant is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Jayant Agro Organics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jayant Agro Organics 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 Jayant Agro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jayant Agro Organics has no effect on the direction of Ford i.e., Ford and Jayant Agro go up and down completely randomly.

Pair Corralation between Ford and Jayant Agro

Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.69 times more return on investment than Jayant Agro. However, Ford Motor is 1.45 times less risky than Jayant Agro. It trades about 0.02 of its potential returns per unit of risk. Jayant Agro Organics is currently generating about -0.11 per unit of risk. If you would invest  957.00  in Ford Motor on December 30, 2024 and sell it today you would earn a total of  15.00  from holding Ford Motor or generate 1.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Ford Motor  vs.  Jayant Agro Organics

Ford Motor

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ford Motor are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Jayant Agro Organics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jayant Agro Organics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Ford and Jayant Agro

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

The idea behind Ford Motor and Jayant Agro Organics 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.