Correlation Between Ford and WEBUY GLOBAL
Can any of the company-specific risk be diversified away by investing in both Ford and WEBUY GLOBAL 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 WEBUY GLOBAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and WEBUY GLOBAL LTD, you can compare the effects of market volatilities on Ford and WEBUY GLOBAL 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 WEBUY GLOBAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and WEBUY GLOBAL.
Diversification Opportunities for Ford and WEBUY GLOBAL
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ford and WEBUY is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and WEBUY GLOBAL LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WEBUY GLOBAL LTD 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 WEBUY GLOBAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WEBUY GLOBAL LTD has no effect on the direction of Ford i.e., Ford and WEBUY GLOBAL go up and down completely randomly.
Pair Corralation between Ford and WEBUY GLOBAL
Given the investment horizon of 90 days Ford Motor is expected to generate 0.09 times more return on investment than WEBUY GLOBAL. However, Ford Motor is 11.44 times less risky than WEBUY GLOBAL. It trades about 0.03 of its potential returns per unit of risk. WEBUY GLOBAL LTD is currently generating about -0.04 per unit of risk. If you would invest 2,091 in Ford Motor on August 26, 2024 and sell it today you would earn a total of 339.00 from holding Ford Motor or generate 16.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 55.94% |
| Values | Daily Returns |
Ford Motor vs. WEBUY GLOBAL LTD
Performance |
| Timeline |
| Ford Motor |
| WEBUY GLOBAL LTD |
Ford and WEBUY GLOBAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and WEBUY GLOBAL
The main advantage of trading using opposite Ford and WEBUY GLOBAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, WEBUY GLOBAL 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 WEBUY GLOBAL will offset losses from the drop in WEBUY GLOBAL's long position.The idea behind Ford Motor and WEBUY GLOBAL LTD 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.| WEBUY GLOBAL vs. MOGU Inc | WEBUY GLOBAL vs. iPower Inc | WEBUY GLOBAL vs. Jeffs Brands | WEBUY GLOBAL vs. Kidpik Corp |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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