Correlation Between Ford and Shenzhen Bioeasy
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By analyzing existing cross correlation between Ford Motor and Shenzhen Bioeasy Biotechnology, you can compare the effects of market volatilities on Ford and Shenzhen Bioeasy 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 Shenzhen Bioeasy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Shenzhen Bioeasy.
Diversification Opportunities for Ford and Shenzhen Bioeasy
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ford and Shenzhen is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Shenzhen Bioeasy Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Bioeasy Bio 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 Shenzhen Bioeasy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Bioeasy Bio has no effect on the direction of Ford i.e., Ford and Shenzhen Bioeasy go up and down completely randomly.
Pair Corralation between Ford and Shenzhen Bioeasy
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.89 times more return on investment than Shenzhen Bioeasy. However, Ford Motor is 1.12 times less risky than Shenzhen Bioeasy. It trades about 0.03 of its potential returns per unit of risk. Shenzhen Bioeasy Biotechnology is currently generating about 0.01 per unit of risk. If you would invest 1,109 in Ford Motor on August 25, 2024 and sell it today you would earn a total of 9.00 from holding Ford Motor or generate 0.81% 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. Shenzhen Bioeasy Biotechnology
Performance |
| Timeline |
| Ford Motor |
| Shenzhen Bioeasy Bio |
Ford and Shenzhen Bioeasy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Shenzhen Bioeasy
The main advantage of trading using opposite Ford and Shenzhen Bioeasy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Shenzhen Bioeasy 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 Shenzhen Bioeasy will offset losses from the drop in Shenzhen Bioeasy's long position.The idea behind Ford Motor and Shenzhen Bioeasy Biotechnology 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.| Shenzhen Bioeasy vs. China State Construction | Shenzhen Bioeasy vs. Poly Real Estate | Shenzhen Bioeasy vs. China Vanke Co | Shenzhen Bioeasy vs. China Merchants Shekou |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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