Correlation Between Ford and ETFS Battery
Can any of the company-specific risk be diversified away by investing in both Ford and ETFS Battery 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 ETFS Battery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and ETFS Battery Tech, you can compare the effects of market volatilities on Ford and ETFS Battery 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 ETFS Battery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and ETFS Battery.
Diversification Opportunities for Ford and ETFS Battery
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ford and ETFS is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and ETFS Battery Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETFS Battery Tech 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 ETFS Battery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETFS Battery Tech has no effect on the direction of Ford i.e., Ford and ETFS Battery go up and down completely randomly.
Pair Corralation between Ford and ETFS Battery
Taking into account the 90-day investment horizon Ford Motor is expected to generate 1.75 times more return on investment than ETFS Battery. However, Ford is 1.75 times more volatile than ETFS Battery Tech. It trades about 0.22 of its potential returns per unit of risk. ETFS Battery Tech is currently generating about -0.04 per unit of risk. If you would invest 1,022 in Ford Motor on September 3, 2024 and sell it today you would earn a total of 91.00 from holding Ford Motor or generate 8.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Ford Motor vs. ETFS Battery Tech
Performance |
| Timeline |
| Ford Motor |
| ETFS Battery Tech |
Ford and ETFS Battery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and ETFS Battery
The main advantage of trading using opposite Ford and ETFS Battery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, ETFS Battery 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 ETFS Battery will offset losses from the drop in ETFS Battery's long position.| Ford vs. GreenPower Motor | Ford vs. ZEEKR Intelligent Technology | Ford vs. Volcon Inc | Ford vs. Ford Motor |
| ETFS Battery vs. Beta Shares SPASX | ETFS Battery vs. Vanguard Australian Property | ETFS Battery vs. SPDR SP 500 | ETFS Battery vs. Vanguard Total Market |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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