Correlation Between Ford and Kelly Strategic

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

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

Diversification Opportunities for Ford and Kelly Strategic

-0.43

Correlation Coefficient

Ford  Kelly Strategic

Very good diversification

The 3 months correlation between Ford and Kelly is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Kelly Strategic Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kelly Strategic Mana 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 Kelly Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kelly Strategic Mana has no effect on the direction of Ford i.e., Ford and Kelly Strategic go up and down completely randomly.

Pair Corralation between Ford and Kelly Strategic

If you would invest  1,518  in Kelly Strategic Management on September 28, 2024 and sell it today you would earn a total of  0.00  from holding Kelly Strategic Management or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.61%
Values	Daily Returns

Ford Motor  vs.  Kelly Strategic Management

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.

Kelly Strategic Mana

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kelly Strategic Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Kelly Strategic is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Ford and Kelly Strategic

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

The idea behind Ford Motor and Kelly Strategic Management 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 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.