Correlation Between Ford and Jiaozuo Wanfang
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By analyzing existing cross correlation between Ford Motor and Jiaozuo Wanfang Aluminum, you can compare the effects of market volatilities on Ford and Jiaozuo Wanfang 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 Jiaozuo Wanfang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Jiaozuo Wanfang.
Diversification Opportunities for Ford and Jiaozuo Wanfang
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ford and Jiaozuo is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Jiaozuo Wanfang Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiaozuo Wanfang Aluminum 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 Jiaozuo Wanfang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiaozuo Wanfang Aluminum has no effect on the direction of Ford i.e., Ford and Jiaozuo Wanfang go up and down completely randomly.
Pair Corralation between Ford and Jiaozuo Wanfang
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.73 times more return on investment than Jiaozuo Wanfang. However, Ford Motor is 1.37 times less risky than Jiaozuo Wanfang. It trades about 0.23 of its potential returns per unit of risk. Jiaozuo Wanfang Aluminum is currently generating about -0.14 per unit of risk. If you would invest 1,015 in Ford Motor on September 1, 2024 and sell it today you would earn a total of 98.00 from holding Ford Motor or generate 9.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ford Motor vs. Jiaozuo Wanfang Aluminum
Performance |
| Timeline |
| Ford Motor |
| Jiaozuo Wanfang Aluminum |
Ford and Jiaozuo Wanfang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Jiaozuo Wanfang
The main advantage of trading using opposite Ford and Jiaozuo Wanfang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Jiaozuo Wanfang 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 Jiaozuo Wanfang will offset losses from the drop in Jiaozuo Wanfang's long position.The idea behind Ford Motor and Jiaozuo Wanfang Aluminum 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.| Jiaozuo Wanfang vs. Zijin Mining Group | Jiaozuo Wanfang vs. Wanhua Chemical Group | Jiaozuo Wanfang vs. Baoshan Iron Steel | Jiaozuo Wanfang vs. Shandong Gold Mining |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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