Correlation Between Ford and Pelayaran Kurnia

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

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

Diversification Opportunities for Ford and Pelayaran Kurnia

0.57

Correlation Coefficient

Ford  Pelayaran Kurnia

Very weak diversification

The 3 months correlation between Ford and Pelayaran is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Pelayaran Kurnia Lautan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pelayaran Kurnia Lautan 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 Pelayaran Kurnia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pelayaran Kurnia Lautan has no effect on the direction of Ford i.e., Ford and Pelayaran Kurnia go up and down completely randomly.

Pair Corralation between Ford and Pelayaran Kurnia

Taking into account the 90-day investment horizon Ford is expected to generate 130.87 times less return on investment than Pelayaran Kurnia. But when comparing it to its historical volatility, Ford Motor is 23.2 times less risky than Pelayaran Kurnia. It trades about 0.01 of its potential returns per unit of risk. Pelayaran Kurnia Lautan is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  10,975  in Pelayaran Kurnia Lautan on September 26, 2024 and sell it today you would lose (675.00) from holding Pelayaran Kurnia Lautan or give up 6.15% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	75.2%
Values	Daily Returns

Ford Motor  vs.  Pelayaran Kurnia Lautan

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.

Pelayaran Kurnia Lautan

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pelayaran Kurnia Lautan has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Pelayaran Kurnia is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Ford and Pelayaran Kurnia

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

The idea behind Ford Motor and Pelayaran Kurnia Lautan 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.

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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.