Correlation Between Ford and Shanghai Phichem
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By analyzing existing cross correlation between Ford Motor and Shanghai Phichem Material, you can compare the effects of market volatilities on Ford and Shanghai Phichem 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 Shanghai Phichem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Shanghai Phichem.
Diversification Opportunities for Ford and Shanghai Phichem
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ford and Shanghai is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Shanghai Phichem Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Phichem Material 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 Shanghai Phichem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Phichem Material has no effect on the direction of Ford i.e., Ford and Shanghai Phichem go up and down completely randomly.
Pair Corralation between Ford and Shanghai Phichem
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.72 times more return on investment than Shanghai Phichem. However, Ford Motor is 1.38 times less risky than Shanghai Phichem. It trades about 0.01 of its potential returns per unit of risk. Shanghai Phichem Material is currently generating about -0.1 per unit of risk. If you would invest 1,002 in Ford Motor on October 25, 2024 and sell it today you would earn a total of 1.00 from holding Ford Motor or generate 0.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 85.71% |
| Values | Daily Returns |
Ford Motor vs. Shanghai Phichem Material
Performance |
| Timeline |
| Ford Motor |
| Shanghai Phichem Material |
Ford and Shanghai Phichem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Shanghai Phichem
The main advantage of trading using opposite Ford and Shanghai Phichem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Shanghai Phichem 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 Shanghai Phichem will offset losses from the drop in Shanghai Phichem's long position.The idea behind Ford Motor and Shanghai Phichem Material 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.| Shanghai Phichem vs. Lecron Energy Saving | Shanghai Phichem vs. HeNan Splendor Science | Shanghai Phichem vs. Industrial Bank Co | Shanghai Phichem vs. Guosheng Financial Holding |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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