Correlation Between Ford and Jiangsu Zhongtian
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By analyzing existing cross correlation between Ford Motor and Jiangsu Zhongtian Technology, you can compare the effects of market volatilities on Ford and Jiangsu Zhongtian 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 Jiangsu Zhongtian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Jiangsu Zhongtian.
Diversification Opportunities for Ford and Jiangsu Zhongtian
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ford and Jiangsu is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Jiangsu Zhongtian Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Zhongtian 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 Jiangsu Zhongtian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Zhongtian has no effect on the direction of Ford i.e., Ford and Jiangsu Zhongtian go up and down completely randomly.
Pair Corralation between Ford and Jiangsu Zhongtian
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.93 times more return on investment than Jiangsu Zhongtian. However, Ford Motor is 1.08 times less risky than Jiangsu Zhongtian. It trades about 0.01 of its potential returns per unit of risk. Jiangsu Zhongtian Technology is currently generating about 0.0 per unit of risk. If you would invest 1,036 in Ford Motor on September 26, 2024 and sell it today you would lose (34.00) from holding Ford Motor or give up 3.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.37% |
| Values | Daily Returns |
Ford Motor vs. Jiangsu Zhongtian Technology
Performance |
| Timeline |
| Ford Motor |
| Jiangsu Zhongtian |
Ford and Jiangsu Zhongtian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Jiangsu Zhongtian
The main advantage of trading using opposite Ford and Jiangsu Zhongtian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Jiangsu Zhongtian 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 Jiangsu Zhongtian will offset losses from the drop in Jiangsu Zhongtian's long position.The idea behind Ford Motor and Jiangsu Zhongtian Technology 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.| Jiangsu Zhongtian vs. Kweichow Moutai Co | Jiangsu Zhongtian vs. Contemporary Amperex Technology | Jiangsu Zhongtian vs. G bits Network Technology | Jiangsu Zhongtian vs. BYD Co Ltd |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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