Correlation Between Ford and Binah Capital
Can any of the company-specific risk be diversified away by investing in both Ford and Binah Capital 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 Binah Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Binah Capital Group,, you can compare the effects of market volatilities on Ford and Binah Capital 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 Binah Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Binah Capital.
Diversification Opportunities for Ford and Binah Capital
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ford and Binah is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Binah Capital Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binah Capital Group, 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 Binah Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Binah Capital Group, has no effect on the direction of Ford i.e., Ford and Binah Capital go up and down completely randomly.
Pair Corralation between Ford and Binah Capital
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.19 times more return on investment than Binah Capital. However, Ford Motor is 5.4 times less risky than Binah Capital. It trades about 0.01 of its potential returns per unit of risk. Binah Capital Group, is currently generating about -0.01 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 Together |
| Strength | Insignificant |
| Accuracy | 34.95% |
| Values | Daily Returns |
Ford Motor vs. Binah Capital Group,
Performance |
| Timeline |
| Ford Motor |
| Binah Capital Group, |
Ford and Binah Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Binah Capital
The main advantage of trading using opposite Ford and Binah Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Binah Capital 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 Binah Capital will offset losses from the drop in Binah Capital's long position.| Ford vs. GreenPower Motor | Ford vs. ZEEKR Intelligent Technology | Ford vs. Volcon Inc | Ford vs. Ford Motor |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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