Correlation Between Ford and SALTX TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both Ford and SALTX TECHNOLOGY 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 SALTX TECHNOLOGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and SALTX TECHNOLOGY HLDG, you can compare the effects of market volatilities on Ford and SALTX TECHNOLOGY 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 SALTX TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and SALTX TECHNOLOGY.
Diversification Opportunities for Ford and SALTX TECHNOLOGY
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ford and SALTX is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and SALTX TECHNOLOGY HLDG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SALTX TECHNOLOGY HLDG 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 SALTX TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SALTX TECHNOLOGY HLDG has no effect on the direction of Ford i.e., Ford and SALTX TECHNOLOGY go up and down completely randomly.
Pair Corralation between Ford and SALTX TECHNOLOGY
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the SALTX TECHNOLOGY. But the stock apears to be less risky and, when comparing its historical volatility, Ford Motor is 2.86 times less risky than SALTX TECHNOLOGY. The stock trades about -0.42 of its potential returns per unit of risk. The SALTX TECHNOLOGY HLDG is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 29.00 in SALTX TECHNOLOGY HLDG on September 26, 2024 and sell it today you would lose (2.00) from holding SALTX TECHNOLOGY HLDG or give up 6.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ford Motor vs. SALTX TECHNOLOGY HLDG
Performance |
| Timeline |
| Ford Motor |
| SALTX TECHNOLOGY HLDG |
Ford and SALTX TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and SALTX TECHNOLOGY
The main advantage of trading using opposite Ford and SALTX TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, SALTX TECHNOLOGY 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 SALTX TECHNOLOGY will offset losses from the drop in SALTX TECHNOLOGY's long position.The idea behind Ford Motor and SALTX TECHNOLOGY HLDG 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.| SALTX TECHNOLOGY vs. Arrow Electronics | SALTX TECHNOLOGY vs. ELECTRONIC ARTS | SALTX TECHNOLOGY vs. Natural Health Trends | SALTX TECHNOLOGY vs. YOOMA WELLNESS INC |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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