Correlation Between Ford and Guangzhou Haozhi
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By analyzing existing cross correlation between Ford Motor and Guangzhou Haozhi Industrial, you can compare the effects of market volatilities on Ford and Guangzhou Haozhi 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 Guangzhou Haozhi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Guangzhou Haozhi.
Diversification Opportunities for Ford and Guangzhou Haozhi
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ford and Guangzhou is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Guangzhou Haozhi Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Haozhi Ind 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 Guangzhou Haozhi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Haozhi Ind has no effect on the direction of Ford i.e., Ford and Guangzhou Haozhi go up and down completely randomly.
Pair Corralation between Ford and Guangzhou Haozhi
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Guangzhou Haozhi. But the stock apears to be less risky and, when comparing its historical volatility, Ford Motor is 1.9 times less risky than Guangzhou Haozhi. The stock trades about 0.0 of its potential returns per unit of risk. The Guangzhou Haozhi Industrial is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,636 in Guangzhou Haozhi Industrial on August 29, 2024 and sell it today you would earn a total of 69.00 from holding Guangzhou Haozhi Industrial or generate 4.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Guangzhou Haozhi Industrial
Performance |
| Timeline |
| Ford Motor |
| Guangzhou Haozhi Ind |
Ford and Guangzhou Haozhi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Guangzhou Haozhi
The main advantage of trading using opposite Ford and Guangzhou Haozhi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Guangzhou Haozhi 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 Guangzhou Haozhi will offset losses from the drop in Guangzhou Haozhi's long position.The idea behind Ford Motor and Guangzhou Haozhi Industrial 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.| Guangzhou Haozhi vs. Eastern Air Logistics | Guangzhou Haozhi vs. Sanxiang Advanced Materials | Guangzhou Haozhi vs. Xinke Material | Guangzhou Haozhi vs. Rising Nonferrous Metals |
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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