Correlation Between Ford and Brunello Cucinelli
Can any of the company-specific risk be diversified away by investing in both Ford and Brunello Cucinelli 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 Brunello Cucinelli into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Brunello Cucinelli SpA, you can compare the effects of market volatilities on Ford and Brunello Cucinelli 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 Brunello Cucinelli. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Brunello Cucinelli.
Diversification Opportunities for Ford and Brunello Cucinelli
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and Brunello is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Brunello Cucinelli SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brunello Cucinelli SpA 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 Brunello Cucinelli. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brunello Cucinelli SpA has no effect on the direction of Ford i.e., Ford and Brunello Cucinelli go up and down completely randomly.
Pair Corralation between Ford and Brunello Cucinelli
Taking into account the 90-day investment horizon Ford Motor is expected to generate 3.41 times more return on investment than Brunello Cucinelli. However, Ford is 3.41 times more volatile than Brunello Cucinelli SpA. It trades about -0.01 of its potential returns per unit of risk. Brunello Cucinelli SpA is currently generating about -0.06 per unit of risk. If you would invest 1,184 in Ford Motor on August 30, 2024 and sell it today you would lose (74.00) from holding Ford Motor or give up 6.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Brunello Cucinelli SpA
Performance |
| Timeline |
| Ford Motor |
| Brunello Cucinelli SpA |
Ford and Brunello Cucinelli Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Brunello Cucinelli
The main advantage of trading using opposite Ford and Brunello Cucinelli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Brunello Cucinelli 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 Brunello Cucinelli will offset losses from the drop in Brunello Cucinelli's long position.The idea behind Ford Motor and Brunello Cucinelli SpA 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.| Brunello Cucinelli vs. Apple Inc | Brunello Cucinelli vs. Microsoft | Brunello Cucinelli vs. Alphabet Inc Class C | Brunello Cucinelli vs. Meta Platforms |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |