Correlation Between Ford and CSIF I
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By analyzing existing cross correlation between Ford Motor and CSIF I Bond, you can compare the effects of market volatilities on Ford and CSIF I 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 CSIF I. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and CSIF I.
Diversification Opportunities for Ford and CSIF I
Very good diversification
The 3 months correlation between Ford and CSIF is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and CSIF I Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSIF I Bond 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 CSIF I. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSIF I Bond has no effect on the direction of Ford i.e., Ford and CSIF I go up and down completely randomly.
Pair Corralation between Ford and CSIF I
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the CSIF I. In addition to that, Ford is 8.67 times more volatile than CSIF I Bond. It trades about -0.09 of its total potential returns per unit of risk. CSIF I Bond is currently generating about 0.16 per unit of volatility. If you would invest 65,730 in CSIF I Bond on September 23, 2024 and sell it today you would earn a total of 1,172 from holding CSIF I Bond or generate 1.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Ford Motor vs. CSIF I Bond
Performance |
| Timeline |
| Ford Motor |
| CSIF I Bond |
Ford and CSIF I Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and CSIF I
The main advantage of trading using opposite Ford and CSIF I positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, CSIF I 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 CSIF I will offset losses from the drop in CSIF I's long position.The idea behind Ford Motor and CSIF I Bond 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.| CSIF I vs. CSIF III Eq | CSIF I vs. UBS Property | CSIF I vs. Procimmo Real Estate | CSIF I vs. Baloise Holding AG |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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