Correlation Between Ford and Zhejiang Yayi
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By analyzing existing cross correlation between Ford Motor and Zhejiang Yayi Metal, you can compare the effects of market volatilities on Ford and Zhejiang Yayi 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 Zhejiang Yayi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Zhejiang Yayi.
Diversification Opportunities for Ford and Zhejiang Yayi
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ford and Zhejiang is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Zhejiang Yayi Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Yayi Metal 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 Zhejiang Yayi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Yayi Metal has no effect on the direction of Ford i.e., Ford and Zhejiang Yayi go up and down completely randomly.
Pair Corralation between Ford and Zhejiang Yayi
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.78 times more return on investment than Zhejiang Yayi. However, Ford Motor is 1.28 times less risky than Zhejiang Yayi. It trades about 0.23 of its potential returns per unit of risk. Zhejiang Yayi Metal is currently generating about 0.14 per unit of risk. If you would invest 1,015 in Ford Motor on September 1, 2024 and sell it today you would earn a total of 98.00 from holding Ford Motor or generate 9.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Ford Motor vs. Zhejiang Yayi Metal
Performance |
| Timeline |
| Ford Motor |
| Zhejiang Yayi Metal |
Ford and Zhejiang Yayi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Zhejiang Yayi
The main advantage of trading using opposite Ford and Zhejiang Yayi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Zhejiang Yayi 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 Zhejiang Yayi will offset losses from the drop in Zhejiang Yayi's long position.The idea behind Ford Motor and Zhejiang Yayi Metal 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.| Zhejiang Yayi vs. Fujian Nanwang Environment | Zhejiang Yayi vs. Panda Financial Holding | Zhejiang Yayi vs. Elite Color Environmental | Zhejiang Yayi vs. Jiangsu Financial Leasing |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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