Correlation Between Ford and Jiangsu Hoperun
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By analyzing existing cross correlation between Ford Motor and Jiangsu Hoperun Software, you can compare the effects of market volatilities on Ford and Jiangsu Hoperun 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 Jiangsu Hoperun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Jiangsu Hoperun.
Diversification Opportunities for Ford and Jiangsu Hoperun
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ford and Jiangsu is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Jiangsu Hoperun Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Hoperun Software 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 Jiangsu Hoperun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Hoperun Software has no effect on the direction of Ford i.e., Ford and Jiangsu Hoperun go up and down completely randomly.
Pair Corralation between Ford and Jiangsu Hoperun
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.38 times more return on investment than Jiangsu Hoperun. However, Ford Motor is 2.6 times less risky than Jiangsu Hoperun. It trades about 0.09 of its potential returns per unit of risk. Jiangsu Hoperun Software is currently generating about -0.05 per unit of risk. If you would invest 988.00 in Ford Motor on October 29, 2024 and sell it today you would earn a total of 24.00 from holding Ford Motor or generate 2.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Ford Motor vs. Jiangsu Hoperun Software
Performance |
| Timeline |
| Ford Motor |
| Jiangsu Hoperun Software |
Ford and Jiangsu Hoperun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Jiangsu Hoperun
The main advantage of trading using opposite Ford and Jiangsu Hoperun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Jiangsu Hoperun 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 Jiangsu Hoperun will offset losses from the drop in Jiangsu Hoperun's long position.The idea behind Ford Motor and Jiangsu Hoperun Software 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.| Jiangsu Hoperun vs. Shandong Polymer Biochemicals | Jiangsu Hoperun vs. Vats Liquor Chain | Jiangsu Hoperun vs. Ningxia Younglight Chemicals | Jiangsu Hoperun vs. Shenzhen Noposion Agrochemicals |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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