Correlation Between Ford and BTG Hotels
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By analyzing existing cross correlation between Ford Motor and BTG Hotels Group, you can compare the effects of market volatilities on Ford and BTG Hotels 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 BTG Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and BTG Hotels.
Diversification Opportunities for Ford and BTG Hotels
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ford and BTG is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and BTG Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTG Hotels Group 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 BTG Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTG Hotels Group has no effect on the direction of Ford i.e., Ford and BTG Hotels go up and down completely randomly.
Pair Corralation between Ford and BTG Hotels
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the BTG Hotels. In addition to that, Ford is 1.51 times more volatile than BTG Hotels Group. It trades about 0.0 of its total potential returns per unit of risk. BTG Hotels Group is currently generating about 0.04 per unit of volatility. If you would invest 1,429 in BTG Hotels Group on August 29, 2024 and sell it today you would earn a total of 16.00 from holding BTG Hotels Group or generate 1.12% 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. BTG Hotels Group
Performance |
| Timeline |
| Ford Motor |
| BTG Hotels Group |
Ford and BTG Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and BTG Hotels
The main advantage of trading using opposite Ford and BTG Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, BTG Hotels 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 BTG Hotels will offset losses from the drop in BTG Hotels' long position.The idea behind Ford Motor and BTG Hotels Group 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.| BTG Hotels vs. Biwin Storage Technology | BTG Hotels vs. PetroChina Co Ltd | BTG Hotels vs. Industrial and Commercial | BTG Hotels vs. China Construction Bank |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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