Correlation Between Ford and Asensus Surgical

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

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

Diversification Opportunities for Ford and Asensus Surgical

0.1

Correlation Coefficient

Ford  Asensus Surgical

Average diversification

The 3 months correlation between Ford and Asensus is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Asensus Surgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asensus Surgical 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 Asensus Surgical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asensus Surgical has no effect on the direction of Ford i.e., Ford and Asensus Surgical go up and down completely randomly.

Pair Corralation between Ford and Asensus Surgical

Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.24 times more return on investment than Asensus Surgical. However, Ford Motor is 4.14 times less risky than Asensus Surgical. It trades about 0.0 of its potential returns per unit of risk. Asensus Surgical is currently generating about -0.03 per unit of risk. If you would invest  1,115  in Ford Motor on September 12, 2024 and sell it today you would lose (59.00) from holding Ford Motor or give up 5.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	69.76%
Values	Daily Returns

Ford Motor  vs.  Asensus Surgical

Ford Motor

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ford Motor are ranked lower than 1 (%) 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.

Asensus Surgical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asensus Surgical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Asensus Surgical is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Ford and Asensus Surgical

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

The idea behind Ford Motor and Asensus Surgical 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.