Correlation Between Ford and TJ Media
Can any of the company-specific risk be diversified away by investing in both Ford and TJ Media 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 TJ Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and TJ media Co, you can compare the effects of market volatilities on Ford and TJ Media 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 TJ Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and TJ Media.
Diversification Opportunities for Ford and TJ Media
Excellent diversification
The 3 months correlation between Ford and 032540 is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and TJ media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TJ media 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 TJ Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TJ media has no effect on the direction of Ford i.e., Ford and TJ Media go up and down completely randomly.
Pair Corralation between Ford and TJ Media
Taking into account the 90-day investment horizon Ford Motor is expected to generate 1.78 times more return on investment than TJ Media. However, Ford is 1.78 times more volatile than TJ media Co. It trades about 0.03 of its potential returns per unit of risk. TJ media Co is currently generating about -0.2 per unit of risk. If you would invest 1,083 in Ford Motor on September 2, 2024 and sell it today you would earn a total of 30.00 from holding Ford Motor or generate 2.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 93.75% |
| Values | Daily Returns |
Ford Motor vs. TJ media Co
Performance |
| Timeline |
| Ford Motor |
| TJ media |
Ford and TJ Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and TJ Media
The main advantage of trading using opposite Ford and TJ Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, TJ Media 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 TJ Media will offset losses from the drop in TJ Media's long position.The idea behind Ford Motor and TJ media Co 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.| TJ Media vs. LG Display | TJ Media vs. Hyundai Motor Co | TJ Media vs. Hyundai Motor Co | TJ Media vs. Adaptive Plasma Technology |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |