Correlation Between Ford and Sinotrans
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By analyzing existing cross correlation between Ford Motor and Sinotrans Ltd Class, you can compare the effects of market volatilities on Ford and Sinotrans 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 Sinotrans. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Sinotrans.
Diversification Opportunities for Ford and Sinotrans
Good diversification
The 3 months correlation between Ford and Sinotrans is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Sinotrans Ltd Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinotrans Class 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 Sinotrans. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinotrans Class has no effect on the direction of Ford i.e., Ford and Sinotrans go up and down completely randomly.
Pair Corralation between Ford and Sinotrans
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Sinotrans. In addition to that, Ford is 1.34 times more volatile than Sinotrans Ltd Class. It trades about -0.36 of its total potential returns per unit of risk. Sinotrans Ltd Class is currently generating about 0.13 per unit of volatility. If you would invest 520.00 in Sinotrans Ltd Class on September 28, 2024 and sell it today you would earn a total of 15.00 from holding Sinotrans Ltd Class or generate 2.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Ford Motor vs. Sinotrans Ltd Class
Performance |
| Timeline |
| Ford Motor |
| Sinotrans Class |
Ford and Sinotrans Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Sinotrans
The main advantage of trading using opposite Ford and Sinotrans positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Sinotrans 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 Sinotrans will offset losses from the drop in Sinotrans' long position.The idea behind Ford Motor and Sinotrans Ltd Class 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.| Sinotrans vs. Ming Yang Smart | Sinotrans vs. 159681 | Sinotrans vs. 159005 | Sinotrans vs. Loctek Ergonomic Technology |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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