Correlation Between DAIMLER AG and Ford

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

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

Diversification Opportunities for DAIMLER AG and Ford

0.91
  Correlation Coefficient
DAIMLER AG
Ford Motor

Almost no diversification

The 3 months correlation between DAIMLER and Ford is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding DAIMLER AG and Ford Motor Company in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Ford Motor and DAIMLER AG 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 DAIMLER AG are associated (or correlated) with Ford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ford Motor has no effect on the direction of DAIMLER AG i.e. DAIMLER AG and Ford go up and down completely randomly.

Pair Corralation between DAIMLER AG and Ford

Assuming the 30 trading days horizon, DAIMLER AG is expected to generate 1.3 times more return on investment than Ford. However, DAIMLER AG is 1.3 times more volatile than Ford Motor. It trades about 0.11 of its potential returns per unit of risk. Ford Motor is currently generating about 0.09 per unit of risk. If you would invest  3,111  in DAIMLER AG on June 12, 2020 and sell it today you would earn a total of  1,020  from holding DAIMLER AG or generate 32.79% return on investment over 30 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

DAIMLER AG  vs.  Ford Motor Company

 Performance (%) 
      Timeline 
DAIMLER AG 
77

DAIMLER AG Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in DAIMLER AG are ranked lower than 7 (%) of all global equities and portfolios over the last 30 days. In spite of rather sluggish fundamental drivers, DAIMLER AG exhibited solid returns over the last few months and may actually be approaching a breakup point.
Ford Motor 
66

Ford Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Ford Motor are ranked lower than 6 (%) of all global equities and portfolios over the last 30 days. In spite of rather sluggish fundamental drivers, Ford exhibited solid returns over the last few months and may actually be approaching a breakup point.

DAIMLER AG and Ford Volatility Contrast

 Predicted Return Density 
      Returns 
Check out your portfolio center. Please also try Fundamental Analysis module to view fundamental data based on most recent published financial statements.


 
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