Correlation Between Mercedes Benz and Ford

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Mercedes Benz 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 Mercedes Benz and Ford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mercedes Benz Group and Ford Motor, you can compare the effects of market volatilities on Mercedes Benz 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 Mercedes Benz with a short position of Ford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercedes Benz and Ford.

Diversification Opportunities for Mercedes Benz and Ford

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Mercedes and Ford is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mercedes Benz Group and Ford Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ford Motor and Mercedes Benz 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 Mercedes Benz Group 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 Mercedes Benz i.e., Mercedes Benz and Ford go up and down completely randomly.

Pair Corralation between Mercedes Benz and Ford

If you would invest  1,155  in Ford Motor on December 30, 2023 and sell it today you would earn a total of  173.00  from holding Ford Motor or generate 14.98% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Mercedes Benz Group  vs.  Ford Motor

 Performance 
       Timeline  
Mercedes Benz Group 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Mercedes Benz Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, Mercedes Benz is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.
Ford Motor 

Risk-Adjusted Performance

7 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Ford Motor are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal technical and fundamental indicators, Ford reported solid returns over the last few months and may actually be approaching a breakup point.

Mercedes Benz and Ford Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Mercedes Benz and Ford

The main advantage of trading using opposite Mercedes Benz and Ford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercedes Benz position performs unexpectedly, Ford 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 Ford will offset losses from the drop in Ford's long position.
The idea behind Mercedes Benz Group and Ford Motor 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.

Other Complementary Tools

Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Commodity Channel
Use Commodity Channel Index to analyze current equity momentum
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Commodity Directory
Find actively traded commodities issued by global exchanges
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency