Correlation Between Ford and Exchange Traded
Can any of the company-specific risk be diversified away by investing in both Ford and Exchange Traded 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 Exchange Traded into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Exchange Traded Concepts, you can compare the effects of market volatilities on Ford and Exchange Traded 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 Exchange Traded. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Exchange Traded.
Diversification Opportunities for Ford and Exchange Traded
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ford and Exchange is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Exchange Traded Concepts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exchange Traded Concepts 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 Exchange Traded. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exchange Traded Concepts has no effect on the direction of Ford i.e., Ford and Exchange Traded go up and down completely randomly.
Pair Corralation between Ford and Exchange Traded
Taking into account the 90-day investment horizon Ford Motor is expected to generate 5.84 times more return on investment than Exchange Traded. However, Ford is 5.84 times more volatile than Exchange Traded Concepts. It trades about 0.01 of its potential returns per unit of risk. Exchange Traded Concepts is currently generating about -0.05 per unit of risk. If you would invest 1,148 in Ford Motor on September 3, 2024 and sell it today you would lose (50.00) from holding Ford Motor or give up 4.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 30.91% |
| Values | Daily Returns |
Ford Motor vs. Exchange Traded Concepts
Performance |
| Timeline |
| Ford Motor |
| Exchange Traded Concepts |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ford and Exchange Traded Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Exchange Traded
The main advantage of trading using opposite Ford and Exchange Traded positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Exchange Traded 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 Exchange Traded will offset losses from the drop in Exchange Traded's long position.| Ford vs. GreenPower Motor | Ford vs. ZEEKR Intelligent Technology | Ford vs. Volcon Inc | Ford vs. Ford Motor |
| Exchange Traded vs. Inspire Tactical Balanced | Exchange Traded vs. Strategy Shares NewfoundReSolve | Exchange Traded vs. iShares ESG Aware | Exchange Traded vs. Eaton Vance Enhanced |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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