Correlation Between Ford and Altegris Crabel
Can any of the company-specific risk be diversified away by investing in both Ford and Altegris Crabel 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 Altegris Crabel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Altegris Crabel Multi Strategy, you can compare the effects of market volatilities on Ford and Altegris Crabel 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 Altegris Crabel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Altegris Crabel.
Diversification Opportunities for Ford and Altegris Crabel
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ford and Altegris is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Altegris Crabel Multi Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altegris Crabel Multi 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 Altegris Crabel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altegris Crabel Multi has no effect on the direction of Ford i.e., Ford and Altegris Crabel go up and down completely randomly.
Pair Corralation between Ford and Altegris Crabel
Taking into account the 90-day investment horizon Ford Motor is expected to generate 3.75 times more return on investment than Altegris Crabel. However, Ford is 3.75 times more volatile than Altegris Crabel Multi Strategy. It trades about -0.01 of its potential returns per unit of risk. Altegris Crabel Multi Strategy is currently generating about -0.09 per unit of risk. If you would invest 1,200 in Ford Motor on September 3, 2024 and sell it today you would lose (87.00) from holding Ford Motor or give up 7.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 89.04% |
| Values | Daily Returns |
Ford Motor vs. Altegris Crabel Multi Strategy
Performance |
| Timeline |
| Ford Motor |
| Altegris Crabel Multi |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Ford and Altegris Crabel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Altegris Crabel
The main advantage of trading using opposite Ford and Altegris Crabel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Altegris Crabel 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 Altegris Crabel will offset losses from the drop in Altegris Crabel's long position.| Ford vs. GreenPower Motor | Ford vs. ZEEKR Intelligent Technology | Ford vs. Volcon Inc | Ford vs. Ford Motor |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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