Correlation Between Ford and Zhuzhou Kibing
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By analyzing existing cross correlation between Ford Motor and Zhuzhou Kibing Group, you can compare the effects of market volatilities on Ford and Zhuzhou Kibing 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 Zhuzhou Kibing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Zhuzhou Kibing.
Diversification Opportunities for Ford and Zhuzhou Kibing
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ford and Zhuzhou is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Zhuzhou Kibing Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhuzhou Kibing Group 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 Zhuzhou Kibing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhuzhou Kibing Group has no effect on the direction of Ford i.e., Ford and Zhuzhou Kibing go up and down completely randomly.
Pair Corralation between Ford and Zhuzhou Kibing
Taking into account the 90-day investment horizon Ford is expected to generate 1.29 times less return on investment than Zhuzhou Kibing. But when comparing it to its historical volatility, Ford Motor is 1.08 times less risky than Zhuzhou Kibing. It trades about 0.08 of its potential returns per unit of risk. Zhuzhou Kibing Group is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 556.00 in Zhuzhou Kibing Group on November 7, 2024 and sell it today you would earn a total of 15.00 from holding Zhuzhou Kibing Group or generate 2.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 85.0% |
| Values | Daily Returns |
Ford Motor vs. Zhuzhou Kibing Group
Performance |
| Timeline |
| Ford Motor |
| Zhuzhou Kibing Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ford and Zhuzhou Kibing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Zhuzhou Kibing
The main advantage of trading using opposite Ford and Zhuzhou Kibing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Zhuzhou Kibing 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 Zhuzhou Kibing will offset losses from the drop in Zhuzhou Kibing's long position.The idea behind Ford Motor and Zhuzhou Kibing Group 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.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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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