Correlation Between Ford and Cartrade Tech
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By analyzing existing cross correlation between Ford Motor and Cartrade Tech Limited, you can compare the effects of market volatilities on Ford and Cartrade Tech 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 Cartrade Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Cartrade Tech.
Diversification Opportunities for Ford and Cartrade Tech
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ford and Cartrade is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Cartrade Tech Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cartrade Tech Limited 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 Cartrade Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cartrade Tech Limited has no effect on the direction of Ford i.e., Ford and Cartrade Tech go up and down completely randomly.
Pair Corralation between Ford and Cartrade Tech
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Cartrade Tech. But the stock apears to be less risky and, when comparing its historical volatility, Ford Motor is 1.11 times less risky than Cartrade Tech. The stock trades about 0.0 of its potential returns per unit of risk. The Cartrade Tech Limited is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 104,220 in Cartrade Tech Limited on August 29, 2024 and sell it today you would earn a total of 29,900 from holding Cartrade Tech Limited or generate 28.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ford Motor vs. Cartrade Tech Limited
Performance |
| Timeline |
| Ford Motor |
| Cartrade Tech Limited |
Ford and Cartrade Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Cartrade Tech
The main advantage of trading using opposite Ford and Cartrade Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Cartrade Tech 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 Cartrade Tech will offset losses from the drop in Cartrade Tech's long position.The idea behind Ford Motor and Cartrade Tech Limited 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.| Cartrade Tech vs. Kingfa Science Technology | Cartrade Tech vs. Rico Auto Industries | Cartrade Tech vs. GACM Technologies Limited | Cartrade Tech vs. COSMO FIRST 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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