Correlation Between Ford and Shenzhen INVT
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By analyzing existing cross correlation between Ford Motor and Shenzhen INVT Electric, you can compare the effects of market volatilities on Ford and Shenzhen INVT 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 Shenzhen INVT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Shenzhen INVT.
Diversification Opportunities for Ford and Shenzhen INVT
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ford and Shenzhen is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Shenzhen INVT Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen INVT Electric 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 Shenzhen INVT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen INVT Electric has no effect on the direction of Ford i.e., Ford and Shenzhen INVT go up and down completely randomly.
Pair Corralation between Ford and Shenzhen INVT
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Shenzhen INVT. But the stock apears to be less risky and, when comparing its historical volatility, Ford Motor is 1.24 times less risky than Shenzhen INVT. The stock trades about 0.0 of its potential returns per unit of risk. The Shenzhen INVT Electric is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 813.00 in Shenzhen INVT Electric on September 12, 2024 and sell it today you would lose (3.00) from holding Shenzhen INVT Electric or give up 0.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.97% |
| Values | Daily Returns |
Ford Motor vs. Shenzhen INVT Electric
Performance |
| Timeline |
| Ford Motor |
| Shenzhen INVT Electric |
Ford and Shenzhen INVT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Shenzhen INVT
The main advantage of trading using opposite Ford and Shenzhen INVT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Shenzhen INVT 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 Shenzhen INVT will offset losses from the drop in Shenzhen INVT's long position.The idea behind Ford Motor and Shenzhen INVT Electric 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.| Shenzhen INVT vs. Shuhua Sports Co | Shenzhen INVT vs. Sichuan Fulin Transportation | Shenzhen INVT vs. Fujian Nanwang Environment | Shenzhen INVT vs. Hang Xiao Steel |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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