Correlation Between Ford and Cannabix Technologies
Can any of the company-specific risk be diversified away by investing in both Ford and Cannabix Technologies 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 Cannabix Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Cannabix Technologies, you can compare the effects of market volatilities on Ford and Cannabix Technologies 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 Cannabix Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Cannabix Technologies.
Diversification Opportunities for Ford and Cannabix Technologies
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and Cannabix is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Cannabix Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cannabix Technologies 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 Cannabix Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cannabix Technologies has no effect on the direction of Ford i.e., Ford and Cannabix Technologies go up and down completely randomly.
Pair Corralation between Ford and Cannabix Technologies
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Cannabix Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Ford Motor is 3.05 times less risky than Cannabix Technologies. The stock trades about -0.01 of its potential returns per unit of risk. The Cannabix Technologies is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 21.00 in Cannabix Technologies on August 28, 2024 and sell it today you would earn a total of 6.00 from holding Cannabix Technologies or generate 28.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Cannabix Technologies
Performance |
| Timeline |
| Ford Motor |
| Cannabix Technologies |
Ford and Cannabix Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Cannabix Technologies
The main advantage of trading using opposite Ford and Cannabix Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Cannabix Technologies 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 Cannabix Technologies will offset losses from the drop in Cannabix Technologies' long position.The idea behind Ford Motor and Cannabix Technologies 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.| Cannabix Technologies vs. Manhattan Scients | Cannabix Technologies vs. VentriPoint Diagnostics | Cannabix Technologies vs. Accelerate Diagnostics | Cannabix Technologies vs. Venus Concept |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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