Correlation Between Ford and CITIC Securities
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By analyzing existing cross correlation between Ford Motor and CITIC Securities Co, you can compare the effects of market volatilities on Ford and CITIC Securities 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 CITIC Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and CITIC Securities.
Diversification Opportunities for Ford and CITIC Securities
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ford and CITIC is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and CITIC Securities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC Securities 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 CITIC Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIC Securities has no effect on the direction of Ford i.e., Ford and CITIC Securities go up and down completely randomly.
Pair Corralation between Ford and CITIC Securities
Taking into account the 90-day investment horizon Ford is expected to generate 2.93 times less return on investment than CITIC Securities. In addition to that, Ford is 1.15 times more volatile than CITIC Securities Co. It trades about 0.01 of its total potential returns per unit of risk. CITIC Securities Co is currently generating about 0.05 per unit of volatility. If you would invest 2,065 in CITIC Securities Co on August 31, 2024 and sell it today you would earn a total of 922.00 from holding CITIC Securities Co or generate 44.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.82% |
| Values | Daily Returns |
Ford Motor vs. CITIC Securities Co
Performance |
| Timeline |
| Ford Motor |
| CITIC Securities |
Ford and CITIC Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and CITIC Securities
The main advantage of trading using opposite Ford and CITIC Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, CITIC Securities 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 CITIC Securities will offset losses from the drop in CITIC Securities' long position.The idea behind Ford Motor and CITIC Securities Co 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.| CITIC Securities vs. Hangzhou Pinming Software | CITIC Securities vs. Ciwen Media Co | CITIC Securities vs. Sportsoul Co Ltd | CITIC Securities vs. Focus Media Information |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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