Correlation Between Ford and Hubei Geoway
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By analyzing existing cross correlation between Ford Motor and Hubei Geoway Investment, you can compare the effects of market volatilities on Ford and Hubei Geoway 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 Hubei Geoway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Hubei Geoway.
Diversification Opportunities for Ford and Hubei Geoway
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ford and Hubei is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Hubei Geoway Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubei Geoway Investment 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 Hubei Geoway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubei Geoway Investment has no effect on the direction of Ford i.e., Ford and Hubei Geoway go up and down completely randomly.
Pair Corralation between Ford and Hubei Geoway
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.88 times more return on investment than Hubei Geoway. However, Ford Motor is 1.14 times less risky than Hubei Geoway. It trades about 0.01 of its potential returns per unit of risk. Hubei Geoway Investment is currently generating about -0.01 per unit of risk. If you would invest 1,110 in Ford Motor on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Ford Motor or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 96.17% |
Values | Daily Returns |
Ford Motor vs. Hubei Geoway Investment
Performance |
Timeline |
Ford Motor |
Hubei Geoway Investment |
Ford and Hubei Geoway Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ford and Hubei Geoway
The main advantage of trading using opposite Ford and Hubei Geoway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Hubei Geoway 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 Hubei Geoway will offset losses from the drop in Hubei Geoway's long position.The idea behind Ford Motor and Hubei Geoway Investment 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.Hubei Geoway vs. Ningxia Building Materials | Hubei Geoway vs. Orinko Advanced Plastics | Hubei Geoway vs. Sanxiang Advanced Materials | Hubei Geoway vs. Ningbo Tip Rubber |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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