Correlation Between Ford and Dividend
Can any of the company-specific risk be diversified away by investing in both Ford and Dividend 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 Dividend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Dividend 15 Split, you can compare the effects of market volatilities on Ford and Dividend 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 Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Dividend.
Diversification Opportunities for Ford and Dividend
Very weak diversification
The 3 months correlation between Ford and Dividend is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Dividend 15 Split in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dividend 15 Split 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 Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dividend 15 Split has no effect on the direction of Ford i.e., Ford and Dividend go up and down completely randomly.
Pair Corralation between Ford and Dividend
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Dividend. In addition to that, Ford is 1.56 times more volatile than Dividend 15 Split. It trades about -0.09 of its total potential returns per unit of risk. Dividend 15 Split is currently generating about -0.07 per unit of volatility. If you would invest 607.00 in Dividend 15 Split on November 9, 2024 and sell it today you would lose (17.00) from holding Dividend 15 Split or give up 2.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Ford Motor vs. Dividend 15 Split
Performance |
| Timeline |
| Ford Motor |
| Dividend 15 Split |
Ford and Dividend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Dividend
The main advantage of trading using opposite Ford and Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Dividend 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 Dividend will offset losses from the drop in Dividend's long position.The idea behind Ford Motor and Dividend 15 Split 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.| Dividend vs. Financial 15 Split | Dividend vs. North American Financial | Dividend vs. Dividend Growth Split | Dividend vs. Life Banc Split |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |