Correlation Between Ford and ANZNZ

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

By analyzing existing cross correlation between Ford Motor and ANZNZ 125 22 JUN 26, you can compare the effects of market volatilities on Ford and ANZNZ 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 ANZNZ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and ANZNZ.

Diversification Opportunities for Ford and ANZNZ

0.21

Correlation Coefficient

Ford  ANZNZ

Modest diversification

The 3 months correlation between Ford and ANZNZ is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and ANZNZ 125 22 JUN 26 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANZNZ 125 22 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 ANZNZ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANZNZ 125 22 has no effect on the direction of Ford i.e., Ford and ANZNZ go up and down completely randomly.

Pair Corralation between Ford and ANZNZ

Taking into account the 90-day investment horizon Ford Motor is expected to generate 2.98 times more return on investment than ANZNZ. However, Ford is 2.98 times more volatile than ANZNZ 125 22 JUN 26. It trades about -0.02 of its potential returns per unit of risk. ANZNZ 125 22 JUN 26 is currently generating about -0.18 per unit of risk. If you would invest  1,042  in Ford Motor on September 29, 2024 and sell it today you would lose (39.00) from holding Ford Motor or give up 3.74% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	49.21%
Values	Daily Returns

Ford Motor  vs.  ANZNZ 125 22 JUN 26

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.

ANZNZ 125 22

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ANZNZ 125 22 JUN 26 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for ANZNZ 125 22 JUN 26 investors.

Pair Trading with Ford and ANZNZ

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

The idea behind Ford Motor and ANZNZ 125 22 JUN 26 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.