Correlation Between Ford and Blue Coast
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By analyzing existing cross correlation between Ford Motor and Blue Coast Hotels, you can compare the effects of market volatilities on Ford and Blue Coast 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 Blue Coast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Blue Coast.
Diversification Opportunities for Ford and Blue Coast
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ford and Blue is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Blue Coast Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Coast Hotels 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 Blue Coast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Coast Hotels has no effect on the direction of Ford i.e., Ford and Blue Coast go up and down completely randomly.
Pair Corralation between Ford and Blue Coast
Taking into account the 90-day investment horizon Ford is expected to generate 2.51 times less return on investment than Blue Coast. In addition to that, Ford is 1.42 times more volatile than Blue Coast Hotels. It trades about 0.05 of its total potential returns per unit of risk. Blue Coast Hotels is currently generating about 0.16 per unit of volatility. If you would invest 871.00 in Blue Coast Hotels on August 28, 2024 and sell it today you would earn a total of 127.00 from holding Blue Coast Hotels or generate 14.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.88% |
| Values | Daily Returns |
Ford Motor vs. Blue Coast Hotels
Performance |
| Timeline |
| Ford Motor |
| Blue Coast Hotels |
Ford and Blue Coast Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Blue Coast
The main advantage of trading using opposite Ford and Blue Coast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Blue Coast 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 Blue Coast will offset losses from the drop in Blue Coast's long position.The idea behind Ford Motor and Blue Coast Hotels 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.| Blue Coast vs. MMTC Limited | Blue Coast vs. Kingfa Science Technology | Blue Coast vs. Rico Auto Industries | Blue Coast vs. GACM Technologies Limited |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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