Correlation Between Ford and Atico Mining
Can any of the company-specific risk be diversified away by investing in both Ford and Atico Mining 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 Atico Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Atico Mining, you can compare the effects of market volatilities on Ford and Atico Mining 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 Atico Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Atico Mining.
Diversification Opportunities for Ford and Atico Mining
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ford and Atico is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Atico Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atico Mining 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 Atico Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atico Mining has no effect on the direction of Ford i.e., Ford and Atico Mining go up and down completely randomly.
Pair Corralation between Ford and Atico Mining
Taking into account the 90-day investment horizon Ford is expected to generate 1.26 times less return on investment than Atico Mining. But when comparing it to its historical volatility, Ford Motor is 2.7 times less risky than Atico Mining. It trades about 0.01 of its potential returns per unit of risk. Atico Mining is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 20.00 in Atico Mining on August 26, 2024 and sell it today you would lose (10.70) from holding Atico Mining or give up 53.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Atico Mining
Performance |
| Timeline |
| Ford Motor |
| Atico Mining |
Ford and Atico Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Atico Mining
The main advantage of trading using opposite Ford and Atico Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Atico Mining 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 Atico Mining will offset losses from the drop in Atico Mining's long position.The idea behind Ford Motor and Atico Mining 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.| Atico Mining vs. Ascendant Resources | Atico Mining vs. Cantex Mine Development | Atico Mining vs. Amarc Resources | Atico Mining vs. Sterling Metals 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |