Correlation Between Ford and Penta Teknoloji

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

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

Diversification Opportunities for Ford and Penta Teknoloji

-0.24

Correlation Coefficient

Ford  Penta Teknoloji

Very good diversification

The 3 months correlation between Ford and Penta is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Penta Teknoloji Urunleri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penta Teknoloji Urunleri 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 Penta Teknoloji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penta Teknoloji Urunleri has no effect on the direction of Ford i.e., Ford and Penta Teknoloji go up and down completely randomly.

Pair Corralation between Ford and Penta Teknoloji

Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Penta Teknoloji. In addition to that, Ford is 1.16 times more volatile than Penta Teknoloji Urunleri. It trades about -0.23 of its total potential returns per unit of risk. Penta Teknoloji Urunleri is currently generating about 0.2 per unit of volatility. If you would invest  1,452  in Penta Teknoloji Urunleri on September 22, 2024 and sell it today you would earn a total of  93.00  from holding Penta Teknoloji Urunleri or generate 6.4% return on investment over 90 days.

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

Ford Motor  vs.  Penta Teknoloji Urunleri

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 latest unfluctuating performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Penta Teknoloji Urunleri

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Penta Teknoloji Urunleri are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Penta Teknoloji is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Ford and Penta Teknoloji

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

The idea behind Ford Motor and Penta Teknoloji Urunleri 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.