Correlation Between Ford and EURASIAN MINERALS
Can any of the company-specific risk be diversified away by investing in both Ford and EURASIAN MINERALS at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Ford and EURASIAN MINERALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and EURASIAN MINERALS, you can compare the effects of market volatilities on Ford and EURASIAN MINERALS 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 EURASIAN MINERALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and EURASIAN MINERALS.
Diversification Opportunities for Ford and EURASIAN MINERALS
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ford and EURASIAN is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and EURASIAN MINERALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EURASIAN MINERALS 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 EURASIAN MINERALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EURASIAN MINERALS has no effect on the direction of Ford i.e., Ford and EURASIAN MINERALS go up and down completely randomly.
Pair Corralation between Ford and EURASIAN MINERALS
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the EURASIAN MINERALS. In addition to that, Ford is 1.11 times more volatile than EURASIAN MINERALS. It trades about -0.09 of its total potential returns per unit of risk. EURASIAN MINERALS is currently generating about 0.01 per unit of volatility. If you would invest 168.00 in EURASIAN MINERALS on November 6, 2024 and sell it today you would earn a total of 1.00 from holding EURASIAN MINERALS or generate 0.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.33% |
| Values | Daily Returns |
Ford Motor vs. EURASIAN MINERALS
Performance |
| Timeline |
| Ford Motor |
| EURASIAN MINERALS |
Ford and EURASIAN MINERALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and EURASIAN MINERALS
The main advantage of trading using opposite Ford and EURASIAN MINERALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, EURASIAN MINERALS 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 EURASIAN MINERALS will offset losses from the drop in EURASIAN MINERALS's long position.The idea behind Ford Motor and EURASIAN MINERALS 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.| EURASIAN MINERALS vs. Singapore Airlines Limited | EURASIAN MINERALS vs. Tradegate AG Wertpapierhandelsbank | EURASIAN MINERALS vs. Tradeweb Markets | EURASIAN MINERALS vs. Indutrade AB |
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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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