Correlation Between Ford and Sunrise New
Can any of the company-specific risk be diversified away by investing in both Ford and Sunrise New 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 Sunrise New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Sunrise New Energy, you can compare the effects of market volatilities on Ford and Sunrise New 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 Sunrise New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Sunrise New.
Diversification Opportunities for Ford and Sunrise New
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ford and Sunrise is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Sunrise New Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunrise New Energy 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 Sunrise New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunrise New Energy has no effect on the direction of Ford i.e., Ford and Sunrise New go up and down completely randomly.
Pair Corralation between Ford and Sunrise New
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.39 times more return on investment than Sunrise New. However, Ford Motor is 2.53 times less risky than Sunrise New. It trades about 0.01 of its potential returns per unit of risk. Sunrise New Energy is currently generating about -0.02 per unit of risk. If you would invest 1,082 in Ford Motor on November 1, 2024 and sell it today you would lose (66.00) from holding Ford Motor or give up 6.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Sunrise New Energy
Performance |
| Timeline |
| Ford Motor |
| Sunrise New Energy |
Ford and Sunrise New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Sunrise New
The main advantage of trading using opposite Ford and Sunrise New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Sunrise New 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 Sunrise New will offset losses from the drop in Sunrise New's long position.The idea behind Ford Motor and Sunrise New Energy 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.| Sunrise New vs. Espey Mfg Electronics | Sunrise New vs. NeoVolta Warrant | Sunrise New vs. Kimball Electronics | Sunrise New vs. Hayward Holdings |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| CEOs Directory Screen CEOs from public companies around the world |