Correlation Between Ford and Cibc Atlas
Can any of the company-specific risk be diversified away by investing in both Ford and Cibc Atlas 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 Cibc Atlas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Cibc Atlas All, you can compare the effects of market volatilities on Ford and Cibc Atlas 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 Cibc Atlas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Cibc Atlas.
Diversification Opportunities for Ford and Cibc Atlas
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ford and Cibc is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Cibc Atlas All in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cibc Atlas All 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 Cibc Atlas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cibc Atlas All has no effect on the direction of Ford i.e., Ford and Cibc Atlas go up and down completely randomly.
Pair Corralation between Ford and Cibc Atlas
Taking into account the 90-day investment horizon Ford Motor is expected to generate 1.46 times more return on investment than Cibc Atlas. However, Ford is 1.46 times more volatile than Cibc Atlas All. It trades about 0.13 of its potential returns per unit of risk. Cibc Atlas All is currently generating about 0.1 per unit of risk. If you would invest 965.00 in Ford Motor on November 3, 2024 and sell it today you would earn a total of 43.00 from holding Ford Motor or generate 4.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Cibc Atlas All
Performance |
| Timeline |
| Ford Motor |
| Cibc Atlas All |
Ford and Cibc Atlas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Cibc Atlas
The main advantage of trading using opposite Ford and Cibc Atlas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Cibc Atlas 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 Cibc Atlas will offset losses from the drop in Cibc Atlas' long position.The idea behind Ford Motor and Cibc Atlas All 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.| Cibc Atlas vs. Pace High Yield | Cibc Atlas vs. Rbc Bluebay Global | Cibc Atlas vs. One Choice Portfolio | Cibc Atlas vs. Transamerica High Yield |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |