Correlation Between Ford and OZYASAR TEL

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

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

Diversification Opportunities for Ford and OZYASAR TEL

-0.09

Correlation Coefficient

Ford  OZYASAR TEL

Good diversification

The 3 months correlation between Ford and OZYASAR is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and OZYASAR TEL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OZYASAR TEL 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 OZYASAR TEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OZYASAR TEL has no effect on the direction of Ford i.e., Ford and OZYASAR TEL go up and down completely randomly.

Pair Corralation between Ford and OZYASAR TEL

Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the OZYASAR TEL. But the stock apears to be less risky and, when comparing its historical volatility, Ford Motor is 1.29 times less risky than OZYASAR TEL. The stock trades about -0.16 of its potential returns per unit of risk. The OZYASAR TEL is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  2,770  in OZYASAR TEL on October 7, 2024 and sell it today you would lose (70.00) from holding OZYASAR TEL or give up 2.53% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.35%
Values	Daily Returns

Ford Motor  vs.  OZYASAR TEL

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.

OZYASAR TEL

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in OZYASAR TEL are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, OZYASAR TEL demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ford and OZYASAR TEL

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

The idea behind Ford Motor and OZYASAR TEL 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.