Correlation Between Ford and Yulie Sekurindo

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

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

Diversification Opportunities for Ford and Yulie Sekurindo

0.06

Correlation Coefficient

Ford  Yulie Sekurindo

Significant diversification

The 3 months correlation between Ford and Yulie is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Yulie Sekurindo Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yulie Sekurindo Tbk 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 Yulie Sekurindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yulie Sekurindo Tbk has no effect on the direction of Ford i.e., Ford and Yulie Sekurindo go up and down completely randomly.

Pair Corralation between Ford and Yulie Sekurindo

Taking into account the 90-day investment horizon Ford Motor is expected to generate 11.53 times more return on investment than Yulie Sekurindo. However, Ford is 11.53 times more volatile than Yulie Sekurindo Tbk. It trades about 0.12 of its potential returns per unit of risk. Yulie Sekurindo Tbk is currently generating about 0.0 per unit of risk. If you would invest  1,022  in Ford Motor on September 5, 2024 and sell it today you would earn a total of  52.00  from holding Ford Motor or generate 5.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Ford Motor  vs.  Yulie Sekurindo Tbk

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.

Yulie Sekurindo Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yulie Sekurindo Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Yulie Sekurindo is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Ford and Yulie Sekurindo

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

The idea behind Ford Motor and Yulie Sekurindo Tbk 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.