Correlation Between Ford and Atlas Salt

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

Diversification Opportunities for Ford and Atlas Salt

0.59
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Ford and Atlas is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Atlas Salt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Salt 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 Atlas Salt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Salt has no effect on the direction of Ford i.e., Ford and Atlas Salt go up and down completely randomly.

Pair Corralation between Ford and Atlas Salt

Taking into account the 90-day investment horizon Ford is expected to generate 2.55 times less return on investment than Atlas Salt. But when comparing it to its historical volatility, Ford Motor is 5.81 times less risky than Atlas Salt. It trades about 0.37 of its potential returns per unit of risk. Atlas Salt is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  239.00  in Atlas Salt on May 21, 2022 and sell it today you would earn a total of  92.00  from holding Atlas Salt or generate 38.49% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Ford Motor  vs.  Atlas Salt

 Performance (%) 
       Timeline  
Ford Motor 
Ford Performance
10 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Ford Motor are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Ford exhibited solid returns over the last few months and may actually be approaching a breakup point.

Ford Price Channel

Atlas Salt 
Atlas Performance
12 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Atlas Salt are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting basic indicators, Atlas Salt exhibited solid returns over the last few months and may actually be approaching a breakup point.

Atlas Price Channel

Ford and Atlas Salt Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ford and Atlas Salt

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

Atlas Salt

Pair trading matchups for Atlas Salt

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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

Other Complementary Tools

My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Go
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Go
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Go
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Go
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Go
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Go
Piotroski F Score
Get Piotroski F Score based on binary analysis strategy of nine different fundamentals
Go
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Go
Price Transformation
Use Price Transformation models to analyze depth of different equity instruments across global markets
Go