Correlation Between Ford and Strer SE

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

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

Diversification Opportunities for Ford and Strer SE

-0.07

Correlation Coefficient

Ford  Strer SE

Good diversification

The 3 months correlation between Ford and Strer is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Strer SE Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strer SE 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 Strer SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strer SE has no effect on the direction of Ford i.e., Ford and Strer SE go up and down completely randomly.

Pair Corralation between Ford and Strer SE

Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Strer SE. But the stock apears to be less risky and, when comparing its historical volatility, Ford Motor is 1.02 times less risky than Strer SE. The stock trades about -0.42 of its potential returns per unit of risk. The Strer SE Co is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  4,670  in Strer SE Co on September 25, 2024 and sell it today you would lose (46.00) from holding Strer SE Co or give up 0.99% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Ford Motor  vs.  Strer SE Co

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.

Strer SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Strer SE Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Ford and Strer SE

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

The idea behind Ford Motor and Strer SE Co 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.