Correlation Between Ford and Bank of XiAn
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By analyzing existing cross correlation between Ford Motor and Bank of XiAn, you can compare the effects of market volatilities on Ford and Bank of XiAn 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 Bank of XiAn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Bank of XiAn.
Diversification Opportunities for Ford and Bank of XiAn
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ford and Bank is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Bank of XiAn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of XiAn 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 Bank of XiAn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of XiAn has no effect on the direction of Ford i.e., Ford and Bank of XiAn go up and down completely randomly.
Pair Corralation between Ford and Bank of XiAn
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Bank of XiAn. But the stock apears to be less risky and, when comparing its historical volatility, Ford Motor is 1.12 times less risky than Bank of XiAn. The stock trades about -0.02 of its potential returns per unit of risk. The Bank of XiAn is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 307.00 in Bank of XiAn on November 2, 2024 and sell it today you would earn a total of 44.00 from holding Bank of XiAn or generate 14.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.15% |
| Values | Daily Returns |
Ford Motor vs. Bank of XiAn
Performance |
| Timeline |
| Ford Motor |
| Bank of XiAn |
Ford and Bank of XiAn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Bank of XiAn
The main advantage of trading using opposite Ford and Bank of XiAn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Bank of XiAn 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 Bank of XiAn will offset losses from the drop in Bank of XiAn's long position.The idea behind Ford Motor and Bank of XiAn 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.| Bank of XiAn vs. Simei Media Co | Bank of XiAn vs. Servyou Software Group | Bank of XiAn vs. Guangdong Jinma Entertainment | Bank of XiAn vs. Ciwen Media 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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