Correlation Between Ford and China Southern
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By analyzing existing cross correlation between Ford Motor and China Southern SSE, you can compare the effects of market volatilities on Ford and China Southern 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 China Southern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and China Southern.
Diversification Opportunities for Ford and China Southern
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ford and China is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and China Southern SSE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Southern SSE 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 China Southern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Southern SSE has no effect on the direction of Ford i.e., Ford and China Southern go up and down completely randomly.
Pair Corralation between Ford and China Southern
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the China Southern. In addition to that, Ford is 1.4 times more volatile than China Southern SSE. It trades about 0.0 of its total potential returns per unit of risk. China Southern SSE is currently generating about 0.04 per unit of volatility. If you would invest 184.00 in China Southern SSE on September 12, 2024 and sell it today you would earn a total of 21.00 from holding China Southern SSE or generate 11.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.97% |
| Values | Daily Returns |
Ford Motor vs. China Southern SSE
Performance |
| Timeline |
| Ford Motor |
| China Southern SSE |
Ford and China Southern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and China Southern
The main advantage of trading using opposite Ford and China Southern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, China Southern 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 China Southern will offset losses from the drop in China Southern's long position.The idea behind Ford Motor and China Southern SSE 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.| China Southern vs. Shenzhen MTC Co | China Southern vs. Ming Yang Smart | China Southern vs. Changzhou Almaden Co | China Southern vs. 159681 |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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