Correlation Between Ford and Abcourt Mines
Can any of the company-specific risk be diversified away by investing in both Ford and Abcourt Mines 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 Abcourt Mines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Abcourt Mines, you can compare the effects of market volatilities on Ford and Abcourt Mines 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 Abcourt Mines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Abcourt Mines.
Diversification Opportunities for Ford and Abcourt Mines
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and Abcourt is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Abcourt Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abcourt Mines 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 Abcourt Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abcourt Mines has no effect on the direction of Ford i.e., Ford and Abcourt Mines go up and down completely randomly.
Pair Corralation between Ford and Abcourt Mines
If you would invest 4.00 in Abcourt Mines on November 29, 2024 and sell it today you would lose (1.00) from holding Abcourt Mines or give up 25.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.33% |
| Values | Daily Returns |
Ford Motor vs. Abcourt Mines
Performance |
| Timeline |
| Ford Motor |
| Abcourt Mines |
Ford and Abcourt Mines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Abcourt Mines
The main advantage of trading using opposite Ford and Abcourt Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Abcourt Mines 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 Abcourt Mines will offset losses from the drop in Abcourt Mines' long position.The idea behind Ford Motor and Abcourt Mines 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.| Abcourt Mines vs. Argo Gold | Abcourt Mines vs. Blue Star Gold | Abcourt Mines vs. Minnova Corp | Abcourt Mines vs. Angkor Resources Corp |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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