Correlation Between Ford and Camus Engineering
Can any of the company-specific risk be diversified away by investing in both Ford and Camus Engineering 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 Camus Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Camus Engineering Construction, you can compare the effects of market volatilities on Ford and Camus Engineering 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 Camus Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Camus Engineering.
Diversification Opportunities for Ford and Camus Engineering
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and Camus is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Camus Engineering Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camus Engineering 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 Camus Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camus Engineering has no effect on the direction of Ford i.e., Ford and Camus Engineering go up and down completely randomly.
Pair Corralation between Ford and Camus Engineering
Taking into account the 90-day investment horizon Ford Motor is expected to generate 1.38 times more return on investment than Camus Engineering. However, Ford is 1.38 times more volatile than Camus Engineering Construction. It trades about 0.02 of its potential returns per unit of risk. Camus Engineering Construction is currently generating about -0.08 per unit of risk. If you would invest 1,096 in Ford Motor on August 29, 2024 and sell it today you would earn a total of 14.00 from holding Ford Motor or generate 1.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 92.19% |
| Values | Daily Returns |
Ford Motor vs. Camus Engineering Construction
Performance |
| Timeline |
| Ford Motor |
| Camus Engineering |
Ford and Camus Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Camus Engineering
The main advantage of trading using opposite Ford and Camus Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Camus Engineering 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 Camus Engineering will offset losses from the drop in Camus Engineering's long position.The idea behind Ford Motor and Camus Engineering Construction 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.| Camus Engineering vs. RF Materials Co | Camus Engineering vs. INNOX Advanced Materials | Camus Engineering vs. PJ Metal Co | Camus Engineering vs. Jeju Semiconductor 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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