Correlation Between Ford and Ameritrust Corp
Can any of the company-specific risk be diversified away by investing in both Ford and Ameritrust Corp 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 Ameritrust Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Ameritrust Corp, you can compare the effects of market volatilities on Ford and Ameritrust Corp 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 Ameritrust Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Ameritrust Corp.
Diversification Opportunities for Ford and Ameritrust Corp
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ford and Ameritrust is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Ameritrust Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameritrust Corp 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 Ameritrust Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ameritrust Corp has no effect on the direction of Ford i.e., Ford and Ameritrust Corp go up and down completely randomly.
Pair Corralation between Ford and Ameritrust Corp
If you would invest 1,094 in Ford Motor on August 29, 2024 and sell it today you would earn a total of 16.00 from holding Ford Motor or generate 1.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Ameritrust Corp
Performance |
| Timeline |
| Ford Motor |
| Ameritrust Corp |
Ford and Ameritrust Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Ameritrust Corp
The main advantage of trading using opposite Ford and Ameritrust Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Ameritrust Corp 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 Ameritrust Corp will offset losses from the drop in Ameritrust Corp's long position.The idea behind Ford Motor and Ameritrust Corp 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.| Ameritrust Corp vs. Morgan Stanley | Ameritrust Corp vs. Goldman Sachs Group | Ameritrust Corp vs. Charles Schwab Corp | Ameritrust Corp vs. Interactive Brokers Group |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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