Correlation Between Ford and Upsales Technology

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

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

Diversification Opportunities for Ford and Upsales Technology

-0.4

Correlation Coefficient

Ford  Upsales Technology

Very good diversification

The 3 months correlation between Ford and Upsales is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Upsales Technology AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Upsales Technology 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 Upsales Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Upsales Technology has no effect on the direction of Ford i.e., Ford and Upsales Technology go up and down completely randomly.

Pair Corralation between Ford and Upsales Technology

Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.95 times more return on investment than Upsales Technology. However, Ford Motor is 1.05 times less risky than Upsales Technology. It trades about -0.01 of its potential returns per unit of risk. Upsales Technology AB is currently generating about -0.06 per unit of risk. If you would invest  1,184  in Ford Motor on September 1, 2024 and sell it today you would lose (71.00) from holding Ford Motor or give up 6.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Ford Motor  vs.  Upsales Technology AB

Ford Motor

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ford Motor are ranked lower than 2 (%) 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.

Upsales Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Upsales Technology AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Ford and Upsales Technology

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

The idea behind Ford Motor and Upsales Technology AB 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.