Correlation Between Ford and California Intermediate-ter
Can any of the company-specific risk be diversified away by investing in both Ford and California Intermediate-ter 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 California Intermediate-ter into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and California Intermediate Term Tax Free, you can compare the effects of market volatilities on Ford and California Intermediate-ter 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 California Intermediate-ter. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and California Intermediate-ter.
Diversification Opportunities for Ford and California Intermediate-ter
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and California is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and California Intermediate Term T in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on California Intermediate-ter 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 California Intermediate-ter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of California Intermediate-ter has no effect on the direction of Ford i.e., Ford and California Intermediate-ter go up and down completely randomly.
Pair Corralation between Ford and California Intermediate-ter
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the California Intermediate-ter. In addition to that, Ford is 15.57 times more volatile than California Intermediate Term Tax Free. It trades about 0.0 of its total potential returns per unit of risk. California Intermediate Term Tax Free is currently generating about 0.11 per unit of volatility. If you would invest 1,104 in California Intermediate Term Tax Free on September 3, 2024 and sell it today you would earn a total of 26.00 from holding California Intermediate Term Tax Free or generate 2.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. California Intermediate Term T
Performance |
| Timeline |
| Ford Motor |
| California Intermediate-ter |
Ford and California Intermediate-ter Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and California Intermediate-ter
The main advantage of trading using opposite Ford and California Intermediate-ter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, California Intermediate-ter 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 California Intermediate-ter will offset losses from the drop in California Intermediate-ter'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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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