Correlation Between Ford and PHN Canadian
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By analyzing existing cross correlation between Ford Motor and PHN Canadian Equity, you can compare the effects of market volatilities on Ford and PHN Canadian 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 PHN Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and PHN Canadian.
Diversification Opportunities for Ford and PHN Canadian
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ford and PHN is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and PHN Canadian Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHN Canadian Equity 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 PHN Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHN Canadian Equity has no effect on the direction of Ford i.e., Ford and PHN Canadian go up and down completely randomly.
Pair Corralation between Ford and PHN Canadian
Taking into account the 90-day investment horizon Ford is expected to generate 1.22 times less return on investment than PHN Canadian. In addition to that, Ford is 3.34 times more volatile than PHN Canadian Equity. It trades about 0.02 of its total potential returns per unit of risk. PHN Canadian Equity is currently generating about 0.08 per unit of volatility. If you would invest 1,748 in PHN Canadian Equity on August 26, 2024 and sell it today you would earn a total of 515.00 from holding PHN Canadian Equity or generate 29.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Ford Motor vs. PHN Canadian Equity
Performance |
| Timeline |
| Ford Motor |
| PHN Canadian Equity |
Ford and PHN Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and PHN Canadian
The main advantage of trading using opposite Ford and PHN Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, PHN Canadian 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 PHN Canadian will offset losses from the drop in PHN Canadian's long position.The idea behind Ford Motor and PHN Canadian Equity 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.| PHN Canadian vs. Fidelity Tactical High | PHN Canadian vs. Bloom Select Income | PHN Canadian vs. Mawer Canadien obligations | PHN Canadian vs. Symphony Floating Rate |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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