Correlation Between Ford and Amplify
Can any of the company-specific risk be diversified away by investing in both Ford and Amplify 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 Amplify into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Amplify, you can compare the effects of market volatilities on Ford and Amplify 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 Amplify. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Amplify.
Diversification Opportunities for Ford and Amplify
Modest diversification
The 3 months correlation between Ford and Amplify is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Amplify in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify 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 Amplify. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify has no effect on the direction of Ford i.e., Ford and Amplify go up and down completely randomly.
Pair Corralation between Ford and Amplify
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.04 times more return on investment than Amplify. However, Ford Motor is 24.89 times less risky than Amplify. It trades about 0.03 of its potential returns per unit of risk. Amplify is currently generating about -0.5 per unit of risk. If you would invest 1,083 in Ford Motor on September 2, 2024 and sell it today you would earn a total of 30.00 from holding Ford Motor or generate 2.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 6.25% |
| Values | Daily Returns |
Ford Motor vs. Amplify
Performance |
| Timeline |
| Ford Motor |
| Amplify |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ford and Amplify Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Amplify
The main advantage of trading using opposite Ford and Amplify positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Amplify 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 Amplify will offset losses from the drop in Amplify's long position.The idea behind Ford Motor and Amplify 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.| Amplify vs. Amplify Thematic All Stars | Amplify vs. Amplify ETF Trust | Amplify vs. Amplify BlackSwan ISWN | Amplify vs. Amplify International Enhanced |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |