Correlation Between Ford and Yuan Longping
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By analyzing existing cross correlation between Ford Motor and Yuan Longping High tech, you can compare the effects of market volatilities on Ford and Yuan Longping 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 Yuan Longping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Yuan Longping.
Diversification Opportunities for Ford and Yuan Longping
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ford and Yuan is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Yuan Longping High tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuan Longping High 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 Yuan Longping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuan Longping High has no effect on the direction of Ford i.e., Ford and Yuan Longping go up and down completely randomly.
Pair Corralation between Ford and Yuan Longping
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Yuan Longping. In addition to that, Ford is 1.12 times more volatile than Yuan Longping High tech. It trades about -0.01 of its total potential returns per unit of risk. Yuan Longping High tech is currently generating about 0.0 per unit of volatility. If you would invest 1,114 in Yuan Longping High tech on August 29, 2024 and sell it today you would lose (20.00) from holding Yuan Longping High tech or give up 1.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.03% |
| Values | Daily Returns |
Ford Motor vs. Yuan Longping High tech
Performance |
| Timeline |
| Ford Motor |
| Yuan Longping High |
Ford and Yuan Longping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Yuan Longping
The main advantage of trading using opposite Ford and Yuan Longping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Yuan Longping 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 Yuan Longping will offset losses from the drop in Yuan Longping's long position.The idea behind Ford Motor and Yuan Longping High tech 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.| Yuan Longping vs. PetroChina Co Ltd | Yuan Longping vs. China Mobile Limited | Yuan Longping vs. Ping An Insurance | Yuan Longping vs. China Petroleum Chemical |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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