Correlation Between Ford and Mobimo Hldg

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

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

Diversification Opportunities for Ford and Mobimo Hldg

-0.61

Correlation Coefficient

Ford  Mobimo Hldg

Excellent diversification

The 3 months correlation between Ford and Mobimo is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Mobimo Hldg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobimo Hldg 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 Mobimo Hldg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mobimo Hldg has no effect on the direction of Ford i.e., Ford and Mobimo Hldg go up and down completely randomly.

Pair Corralation between Ford and Mobimo Hldg

Taking into account the 90-day investment horizon Ford is expected to generate 5.64 times less return on investment than Mobimo Hldg. In addition to that, Ford is 2.44 times more volatile than Mobimo Hldg. It trades about 0.0 of its total potential returns per unit of risk. Mobimo Hldg is currently generating about 0.06 per unit of volatility. If you would invest  23,528  in Mobimo Hldg on October 7, 2024 and sell it today you would earn a total of  6,172  from holding Mobimo Hldg or generate 26.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.6%
Values	Daily Returns

Ford Motor  vs.  Mobimo Hldg

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.

Mobimo Hldg

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mobimo Hldg are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Mobimo Hldg may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Ford and Mobimo Hldg

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

The idea behind Ford Motor and Mobimo Hldg 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.