Correlation Between Ford and CytomX Therapeutics
Can any of the company-specific risk be diversified away by investing in both Ford and CytomX Therapeutics 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 CytomX Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and CytomX Therapeutics, you can compare the effects of market volatilities on Ford and CytomX Therapeutics 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 CytomX Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and CytomX Therapeutics.
Diversification Opportunities for Ford and CytomX Therapeutics
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and CytomX is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and CytomX Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CytomX Therapeutics 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 CytomX Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CytomX Therapeutics has no effect on the direction of Ford i.e., Ford and CytomX Therapeutics go up and down completely randomly.
Pair Corralation between Ford and CytomX Therapeutics
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.71 times more return on investment than CytomX Therapeutics. However, Ford Motor is 1.4 times less risky than CytomX Therapeutics. It trades about 0.0 of its potential returns per unit of risk. CytomX Therapeutics is currently generating about -0.14 per unit of risk. If you would invest 1,135 in Ford Motor on August 24, 2024 and sell it today you would lose (55.00) from holding Ford Motor or give up 4.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Ford Motor vs. CytomX Therapeutics
Performance |
| Timeline |
| Ford Motor |
| CytomX Therapeutics |
Ford and CytomX Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and CytomX Therapeutics
The main advantage of trading using opposite Ford and CytomX Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, CytomX Therapeutics 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 CytomX Therapeutics will offset losses from the drop in CytomX Therapeutics' long position.The idea behind Ford Motor and CytomX Therapeutics 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.| CytomX Therapeutics vs. ZyVersa Therapeutics | CytomX Therapeutics vs. Sonnet Biotherapeutics Holdings | CytomX Therapeutics vs. Zura Bio Limited | CytomX Therapeutics vs. Phio Pharmaceuticals Corp |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |