Correlation Between Ford and CapitaLand Investment
Can any of the company-specific risk be diversified away by investing in both Ford and CapitaLand Investment 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 CapitaLand Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and CapitaLand Investment Limited, you can compare the effects of market volatilities on Ford and CapitaLand Investment 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 CapitaLand Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and CapitaLand Investment.
Diversification Opportunities for Ford and CapitaLand Investment
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ford and CapitaLand is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and CapitaLand Investment Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CapitaLand Investment 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 CapitaLand Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CapitaLand Investment has no effect on the direction of Ford i.e., Ford and CapitaLand Investment go up and down completely randomly.
Pair Corralation between Ford and CapitaLand Investment
If you would invest 990.00 in Ford Motor on October 23, 2024 and sell it today you would earn a total of 53.00 from holding Ford Motor or generate 5.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Ford Motor vs. CapitaLand Investment Limited
Performance |
| Timeline |
| Ford Motor |
| CapitaLand Investment |
Ford and CapitaLand Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and CapitaLand Investment
The main advantage of trading using opposite Ford and CapitaLand Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, CapitaLand Investment 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 CapitaLand Investment will offset losses from the drop in CapitaLand Investment's long position.The idea behind Ford Motor and CapitaLand Investment 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.| CapitaLand Investment vs. IRSA Inversiones Y | CapitaLand Investment vs. Anywhere Real Estate | CapitaLand Investment vs. Newmark Group | CapitaLand Investment vs. Wharf Real Estate |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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