Correlation Between Ford and Jiangxi JDL
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By analyzing existing cross correlation between Ford Motor and Jiangxi JDL Environmental, you can compare the effects of market volatilities on Ford and Jiangxi JDL 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 Jiangxi JDL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Jiangxi JDL.
Diversification Opportunities for Ford and Jiangxi JDL
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ford and Jiangxi is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Jiangxi JDL Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangxi JDL Environmental 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 Jiangxi JDL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangxi JDL Environmental has no effect on the direction of Ford i.e., Ford and Jiangxi JDL go up and down completely randomly.
Pair Corralation between Ford and Jiangxi JDL
Taking into account the 90-day investment horizon Ford Motor is expected to generate 1.35 times more return on investment than Jiangxi JDL. However, Ford is 1.35 times more volatile than Jiangxi JDL Environmental. It trades about 0.03 of its potential returns per unit of risk. Jiangxi JDL Environmental is currently generating about 0.02 per unit of risk. If you would invest 1,109 in Ford Motor on August 25, 2024 and sell it today you would earn a total of 9.00 from holding Ford Motor or generate 0.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Ford Motor vs. Jiangxi JDL Environmental
Performance |
| Timeline |
| Ford Motor |
| Jiangxi JDL Environmental |
Ford and Jiangxi JDL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Jiangxi JDL
The main advantage of trading using opposite Ford and Jiangxi JDL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Jiangxi JDL 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 Jiangxi JDL will offset losses from the drop in Jiangxi JDL's long position.The idea behind Ford Motor and Jiangxi JDL Environmental 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.| Jiangxi JDL vs. Guizhou BroadcastingTV Info | Jiangxi JDL vs. Xizi Clean Energy | Jiangxi JDL vs. Longjian Road Bridge | Jiangxi JDL vs. XinJiang GuoTong Pipeline |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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