Correlation Between Ford and CUSTODIAN INVESTMENT
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By analyzing existing cross correlation between Ford Motor and CUSTODIAN INVESTMENT PLC, you can compare the effects of market volatilities on Ford and CUSTODIAN INVESTMENT 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 CUSTODIAN INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and CUSTODIAN INVESTMENT.
Diversification Opportunities for Ford and CUSTODIAN INVESTMENT
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and CUSTODIAN is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and CUSTODIAN INVESTMENT PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CUSTODIAN INVESTMENT PLC 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 CUSTODIAN INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CUSTODIAN INVESTMENT PLC has no effect on the direction of Ford i.e., Ford and CUSTODIAN INVESTMENT go up and down completely randomly.
Pair Corralation between Ford and CUSTODIAN INVESTMENT
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.77 times more return on investment than CUSTODIAN INVESTMENT. However, Ford Motor is 1.3 times less risky than CUSTODIAN INVESTMENT. It trades about 0.25 of its potential returns per unit of risk. CUSTODIAN INVESTMENT PLC is currently generating about 0.15 per unit of risk. If you would invest 1,008 in Ford Motor on September 2, 2024 and sell it today you would earn a total of 105.00 from holding Ford Motor or generate 10.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ford Motor vs. CUSTODIAN INVESTMENT PLC
Performance |
| Timeline |
| Ford Motor |
| CUSTODIAN INVESTMENT PLC |
Ford and CUSTODIAN INVESTMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and CUSTODIAN INVESTMENT
The main advantage of trading using opposite Ford and CUSTODIAN INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, CUSTODIAN INVESTMENT 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 CUSTODIAN INVESTMENT will offset losses from the drop in CUSTODIAN INVESTMENT's long position.The idea behind Ford Motor and CUSTODIAN INVESTMENT PLC 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.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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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