Correlation Between Ford and Electrovaya
Can any of the company-specific risk be diversified away by investing in both Ford and Electrovaya 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 Electrovaya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Electrovaya, you can compare the effects of market volatilities on Ford and Electrovaya 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 Electrovaya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Electrovaya.
Diversification Opportunities for Ford and Electrovaya
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ford and Electrovaya is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Electrovaya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electrovaya 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 Electrovaya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electrovaya has no effect on the direction of Ford i.e., Ford and Electrovaya go up and down completely randomly.
Pair Corralation between Ford and Electrovaya
Taking into account the 90-day investment horizon Ford is expected to generate 7.26 times less return on investment than Electrovaya. But when comparing it to its historical volatility, Ford Motor is 1.5 times less risky than Electrovaya. It trades about 0.01 of its potential returns per unit of risk. Electrovaya is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 436.00 in Electrovaya on September 3, 2024 and sell it today you would earn a total of 68.00 from holding Electrovaya or generate 15.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 30.91% |
| Values | Daily Returns |
Ford Motor vs. Electrovaya
Performance |
| Timeline |
| Ford Motor |
| Electrovaya |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ford and Electrovaya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Electrovaya
The main advantage of trading using opposite Ford and Electrovaya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Electrovaya 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 Electrovaya will offset losses from the drop in Electrovaya's long position.| Ford vs. GreenPower Motor | Ford vs. ZEEKR Intelligent Technology | Ford vs. Volcon Inc | Ford vs. Ford Motor |
| Electrovaya vs. Eguana Technologies | Electrovaya vs. Nano One Materials | Electrovaya vs. Solar Alliance Energy | Electrovaya vs. Exro Technologies |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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