Correlation Between Ford and Changjiang Publishing
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By analyzing existing cross correlation between Ford Motor and Changjiang Publishing Media, you can compare the effects of market volatilities on Ford and Changjiang Publishing 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 Changjiang Publishing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Changjiang Publishing.
Diversification Opportunities for Ford and Changjiang Publishing
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ford and Changjiang is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Changjiang Publishing Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changjiang Publishing 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 Changjiang Publishing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changjiang Publishing has no effect on the direction of Ford i.e., Ford and Changjiang Publishing go up and down completely randomly.
Pair Corralation between Ford and Changjiang Publishing
Taking into account the 90-day investment horizon Ford Motor is expected to generate 1.56 times more return on investment than Changjiang Publishing. However, Ford is 1.56 times more volatile than Changjiang Publishing Media. It trades about 0.0 of its potential returns per unit of risk. Changjiang Publishing Media is currently generating about -0.1 per unit of risk. If you would invest 1,122 in Ford Motor on August 29, 2024 and sell it today you would lose (12.00) from holding Ford Motor or give up 1.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Changjiang Publishing Media
Performance |
| Timeline |
| Ford Motor |
| Changjiang Publishing |
Ford and Changjiang Publishing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Changjiang Publishing
The main advantage of trading using opposite Ford and Changjiang Publishing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Changjiang Publishing 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 Changjiang Publishing will offset losses from the drop in Changjiang Publishing's long position.The idea behind Ford Motor and Changjiang Publishing Media 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.| Changjiang Publishing vs. China State Construction | Changjiang Publishing vs. Huafa Industrial Co | Changjiang Publishing vs. China International Capital | Changjiang Publishing vs. Kweichow Moutai Co |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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