Correlation Between Ford and MOBILE FACTORY
Can any of the company-specific risk be diversified away by investing in both Ford and MOBILE FACTORY 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 MOBILE FACTORY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and MOBILE FACTORY INC, you can compare the effects of market volatilities on Ford and MOBILE FACTORY 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 MOBILE FACTORY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and MOBILE FACTORY.
Diversification Opportunities for Ford and MOBILE FACTORY
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and MOBILE is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and MOBILE FACTORY INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOBILE FACTORY INC 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 MOBILE FACTORY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOBILE FACTORY INC has no effect on the direction of Ford i.e., Ford and MOBILE FACTORY go up and down completely randomly.
Pair Corralation between Ford and MOBILE FACTORY
Taking into account the 90-day investment horizon Ford Motor is expected to generate 1.04 times more return on investment than MOBILE FACTORY. However, Ford is 1.04 times more volatile than MOBILE FACTORY INC. It trades about 0.0 of its potential returns per unit of risk. MOBILE FACTORY INC is currently generating about 0.0 per unit of risk. If you would invest 1,049 in Ford Motor on October 11, 2024 and sell it today you would lose (75.00) from holding Ford Motor or give up 7.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Ford Motor vs. MOBILE FACTORY INC
Performance |
| Timeline |
| Ford Motor |
| MOBILE FACTORY INC |
Ford and MOBILE FACTORY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and MOBILE FACTORY
The main advantage of trading using opposite Ford and MOBILE FACTORY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, MOBILE FACTORY 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 MOBILE FACTORY will offset losses from the drop in MOBILE FACTORY's long position.| Ford vs. Canoo Inc | Ford vs. Aquagold International | Ford vs. Morningstar Unconstrained Allocation | Ford vs. Thrivent High Yield |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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