Correlation Between Ford and Capital Senior
Can any of the company-specific risk be diversified away by investing in both Ford and Capital Senior 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 Capital Senior into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Capital Senior Living, you can compare the effects of market volatilities on Ford and Capital Senior 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 Capital Senior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Capital Senior.
Diversification Opportunities for Ford and Capital Senior
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ford and Capital is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Capital Senior Living in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Senior Living 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 Capital Senior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Senior Living has no effect on the direction of Ford i.e., Ford and Capital Senior go up and down completely randomly.
Pair Corralation between Ford and Capital Senior
If you would invest 1,131 in Ford Motor on August 29, 2024 and sell it today you would lose (21.00) from holding Ford Motor or give up 1.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Ford Motor vs. Capital Senior Living
Performance |
| Timeline |
| Ford Motor |
| Capital Senior Living |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ford and Capital Senior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Capital Senior
The main advantage of trading using opposite Ford and Capital Senior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Capital Senior 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 Capital Senior will offset losses from the drop in Capital Senior's long position.The idea behind Ford Motor and Capital Senior Living 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.| Capital Senior vs. Century Aluminum | Capital Senior vs. Universal Music Group | Capital Senior vs. Summit Materials | Capital Senior vs. Grupo Simec SAB |
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 CEOs Directory module to screen CEOs from public companies around the world.
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