Correlation Between Ford and Nanjing Yunhai
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By analyzing existing cross correlation between Ford Motor and Nanjing Yunhai Special, you can compare the effects of market volatilities on Ford and Nanjing Yunhai 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 Nanjing Yunhai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Nanjing Yunhai.
Diversification Opportunities for Ford and Nanjing Yunhai
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ford and Nanjing is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Nanjing Yunhai Special in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanjing Yunhai Special 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 Nanjing Yunhai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanjing Yunhai Special has no effect on the direction of Ford i.e., Ford and Nanjing Yunhai go up and down completely randomly.
Pair Corralation between Ford and Nanjing Yunhai
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Nanjing Yunhai. But the stock apears to be less risky and, when comparing its historical volatility, Ford Motor is 2.39 times less risky than Nanjing Yunhai. The stock trades about -0.18 of its potential returns per unit of risk. The Nanjing Yunhai Special is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,116 in Nanjing Yunhai Special on September 13, 2024 and sell it today you would earn a total of 215.00 from holding Nanjing Yunhai Special or generate 19.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ford Motor vs. Nanjing Yunhai Special
Performance |
| Timeline |
| Ford Motor |
| Nanjing Yunhai Special |
Ford and Nanjing Yunhai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Nanjing Yunhai
The main advantage of trading using opposite Ford and Nanjing Yunhai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Nanjing Yunhai 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 Nanjing Yunhai will offset losses from the drop in Nanjing Yunhai's long position.The idea behind Ford Motor and Nanjing Yunhai Special 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.| Nanjing Yunhai vs. Ye Chiu Metal | Nanjing Yunhai vs. Qingdao Choho Industrial | Nanjing Yunhai vs. Hainan Mining Co | Nanjing Yunhai vs. Chengtun Mining Group |
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 Stocks Directory module to find actively traded stocks across global markets.
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