Correlation Between Ford and Ab Income
Can any of the company-specific risk be diversified away by investing in both Ford and Ab Income 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 Ab Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Ab Income Fund, you can compare the effects of market volatilities on Ford and Ab Income 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 Ab Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Ab Income.
Diversification Opportunities for Ford and Ab Income
Very good diversification
The 3 months correlation between Ford and AKGCX is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Ab Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Income Fund 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 Ab Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Income Fund has no effect on the direction of Ford i.e., Ford and Ab Income go up and down completely randomly.
Pair Corralation between Ford and Ab Income
Taking into account the 90-day investment horizon Ford Motor is expected to generate 5.05 times more return on investment than Ab Income. However, Ford is 5.05 times more volatile than Ab Income Fund. It trades about 0.01 of its potential returns per unit of risk. Ab Income Fund is currently generating about 0.03 per unit of risk. If you would invest 1,148 in Ford Motor on September 3, 2024 and sell it today you would lose (50.00) from holding Ford Motor or give up 4.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Ab Income Fund
Performance |
| Timeline |
| Ford Motor |
| Ab Income Fund |
Ford and Ab Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Ab Income
The main advantage of trading using opposite Ford and Ab Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Ab Income 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 Ab Income will offset losses from the drop in Ab Income's long position.| Ford vs. GreenPower Motor | Ford vs. ZEEKR Intelligent Technology | Ford vs. Volcon Inc | Ford vs. Ford Motor |
| Ab Income vs. The Hartford Emerging | Ab Income vs. Fundvantage Trust | Ab Income vs. Barings Emerging Markets | Ab Income vs. Rbc Emerging Markets |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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