Correlation Between Ford and Clairvest
Can any of the company-specific risk be diversified away by investing in both Ford and Clairvest 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 Clairvest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Clairvest Group, you can compare the effects of market volatilities on Ford and Clairvest 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 Clairvest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Clairvest.
Diversification Opportunities for Ford and Clairvest
Modest diversification
The 3 months correlation between Ford and Clairvest is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Clairvest Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clairvest Group 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 Clairvest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clairvest Group has no effect on the direction of Ford i.e., Ford and Clairvest go up and down completely randomly.
Pair Corralation between Ford and Clairvest
Taking into account the 90-day investment horizon Ford Motor is expected to generate 1.81 times more return on investment than Clairvest. However, Ford is 1.81 times more volatile than Clairvest Group. It trades about 0.0 of its potential returns per unit of risk. Clairvest Group is currently generating about 0.0 per unit of risk. If you would invest 1,138 in Ford Motor on October 29, 2024 and sell it today you would lose (100.00) from holding Ford Motor or give up 8.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Ford Motor vs. Clairvest Group
Performance |
| Timeline |
| Ford Motor |
| Clairvest Group |
Ford and Clairvest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Clairvest
The main advantage of trading using opposite Ford and Clairvest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Clairvest 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 Clairvest will offset losses from the drop in Clairvest's long position.The idea behind Ford Motor and Clairvest Group 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.| Clairvest vs. Clarke Inc | Clairvest vs. Guardian Capital Group | Clairvest vs. Accord Financial Corp | Clairvest vs. E L Financial 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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