Correlation Between Ford and Cardiff Oncology
Can any of the company-specific risk be diversified away by investing in both Ford and Cardiff Oncology 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 Cardiff Oncology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Cardiff Oncology, you can compare the effects of market volatilities on Ford and Cardiff Oncology 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 Cardiff Oncology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Cardiff Oncology.
Diversification Opportunities for Ford and Cardiff Oncology
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ford and Cardiff is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Cardiff Oncology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardiff Oncology 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 Cardiff Oncology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardiff Oncology has no effect on the direction of Ford i.e., Ford and Cardiff Oncology go up and down completely randomly.
Pair Corralation between Ford and Cardiff Oncology
Taking into account the 90-day investment horizon Ford is expected to generate 15.43 times less return on investment than Cardiff Oncology. But when comparing it to its historical volatility, Ford Motor is 3.04 times less risky than Cardiff Oncology. It trades about 0.01 of its potential returns per unit of risk. Cardiff Oncology is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 175.00 in Cardiff Oncology on September 3, 2024 and sell it today you would earn a total of 86.00 from holding Cardiff Oncology or generate 49.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Cardiff Oncology
Performance |
| Timeline |
| Ford Motor |
| Cardiff Oncology |
Ford and Cardiff Oncology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Cardiff Oncology
The main advantage of trading using opposite Ford and Cardiff Oncology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Cardiff Oncology 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 Cardiff Oncology will offset losses from the drop in Cardiff Oncology's long position.The idea behind Ford Motor and Cardiff Oncology 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.| Cardiff Oncology vs. Reviva Pharmaceuticals Holdings | Cardiff Oncology vs. PDS Biotechnology Corp | Cardiff Oncology vs. Reviva Pharmaceuticals Holdings | Cardiff Oncology vs. Eyenovia |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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