Correlation Between Ford and Campbell Resources
Can any of the company-specific risk be diversified away by investing in both Ford and Campbell Resources 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 Campbell Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Campbell Resources, you can compare the effects of market volatilities on Ford and Campbell Resources 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 Campbell Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Campbell Resources.
Diversification Opportunities for Ford and Campbell Resources
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and Campbell is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Campbell Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Campbell Resources 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 Campbell Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Campbell Resources has no effect on the direction of Ford i.e., Ford and Campbell Resources go up and down completely randomly.
Pair Corralation between Ford and Campbell Resources
If you would invest (100.00) in Campbell Resources on August 27, 2024 and sell it today you would earn a total of 100.00 from holding Campbell Resources or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Ford Motor vs. Campbell Resources
Performance |
| Timeline |
| Ford Motor |
| Campbell Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ford and Campbell Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Campbell Resources
The main advantage of trading using opposite Ford and Campbell Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Campbell Resources 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 Campbell Resources will offset losses from the drop in Campbell Resources' long position.The idea behind Ford Motor and Campbell Resources 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.| Campbell Resources vs. Maritime Resources Corp | Campbell Resources vs. Grande Portage Resources | Campbell Resources vs. Red Eagle Mining | Campbell Resources vs. Flowery Gold Mines |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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