Correlation Between ECD Automotive and F PD

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

By analyzing existing cross correlation between ECD Automotive Design and F PD, you can compare the effects of market volatilities on ECD Automotive and F PD 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 ECD Automotive with a short position of F PD. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECD Automotive and F PD.

Diversification Opportunities for ECD Automotive and F PD

-0.73

Correlation Coefficient

ECD Automotive  F PD

Pay attention - limited upside

The 3 months correlation between ECD and F-PD is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding ECD Automotive Design and F PD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on F PD and ECD Automotive 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 ECD Automotive Design are associated (or correlated) with F PD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of F PD has no effect on the direction of ECD Automotive i.e., ECD Automotive and F PD go up and down completely randomly.

Pair Corralation between ECD Automotive and F PD

Given the investment horizon of 90 days ECD Automotive Design is expected to under-perform the F PD. In addition to that, ECD Automotive is 13.25 times more volatile than F PD. It trades about -0.11 of its total potential returns per unit of risk. F PD is currently generating about 0.28 per unit of volatility. If you would invest  2,108  in F PD on May 14, 2025 and sell it today you would earn a total of  239.00  from holding F PD or generate 11.34% return on investment over 90 days.

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

ECD Automotive Design  vs.  F PD

ECD Automotive Design

Risk-Adjusted Performance

Weakest

Over the last 90 days ECD Automotive Design has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

F PD

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in F PD are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, F PD may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with ECD Automotive and F PD

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

The idea behind ECD Automotive Design and F PD 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.

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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.