Correlation Between Ford and Ecc Cap
Can any of the company-specific risk be diversified away by investing in both Ford and Ecc Cap 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 Ecc Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Ecc Cap Corp, you can compare the effects of market volatilities on Ford and Ecc Cap 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 Ecc Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Ecc Cap.
Diversification Opportunities for Ford and Ecc Cap
Very good diversification
The 3 months correlation between Ford and Ecc is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Ecc Cap Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecc Cap Corp 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 Ecc Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecc Cap Corp has no effect on the direction of Ford i.e., Ford and Ecc Cap go up and down completely randomly.
Pair Corralation between Ford and Ecc Cap
If you would invest 1,027 in Ford Motor on August 30, 2024 and sell it today you would earn a total of 83.00 from holding Ford Motor or generate 8.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Ford Motor vs. Ecc Cap Corp
Performance |
| Timeline |
| Ford Motor |
| Ecc Cap Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ford and Ecc Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Ecc Cap
The main advantage of trading using opposite Ford and Ecc Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Ecc Cap 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 Ecc Cap will offset losses from the drop in Ecc Cap's long position.The idea behind Ford Motor and Ecc Cap Corp 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.| Ecc Cap vs. Ready Capital Corp | Ecc Cap vs. Ellington Residential Mortgage | Ecc Cap vs. Ellington Financial | Ecc Cap vs. Dynex Capital |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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