Correlation Between Ford and Capitania Infra
Can any of the company-specific risk be diversified away by investing in both Ford and Capitania Infra 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 Capitania Infra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Capitania Infra Fic, you can compare the effects of market volatilities on Ford and Capitania Infra 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 Capitania Infra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Capitania Infra.
Diversification Opportunities for Ford and Capitania Infra
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and Capitania is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Capitania Infra Fic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capitania Infra Fic 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 Capitania Infra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capitania Infra Fic has no effect on the direction of Ford i.e., Ford and Capitania Infra go up and down completely randomly.
Pair Corralation between Ford and Capitania Infra
Taking into account the 90-day investment horizon Ford Motor is expected to generate 2.62 times more return on investment than Capitania Infra. However, Ford is 2.62 times more volatile than Capitania Infra Fic. It trades about 0.22 of its potential returns per unit of risk. Capitania Infra Fic is currently generating about -0.02 per unit of risk. If you would invest 1,022 in Ford Motor on September 3, 2024 and sell it today you would earn a total of 91.00 from holding Ford Motor or generate 8.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Ford Motor vs. Capitania Infra Fic
Performance |
| Timeline |
| Ford Motor |
| Capitania Infra Fic |
Ford and Capitania Infra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Capitania Infra
The main advantage of trading using opposite Ford and Capitania Infra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Capitania Infra 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 Capitania Infra will offset losses from the drop in Capitania Infra's long position.| Ford vs. GreenPower Motor | Ford vs. ZEEKR Intelligent Technology | Ford vs. Volcon Inc | Ford vs. Ford Motor |
| Capitania Infra vs. Capitania Agro Strategies | Capitania Infra vs. Capitania Securities II | Capitania Infra vs. RB Capital Office | Capitania Infra vs. Ishares Msci Brazil |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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