Correlation Between Ford and Excellon Resources
Can any of the company-specific risk be diversified away by investing in both Ford and Excellon Resources 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 Excellon Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Excellon Resources, you can compare the effects of market volatilities on Ford and Excellon Resources 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 Excellon Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Excellon Resources.
Diversification Opportunities for Ford and Excellon Resources
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ford and Excellon is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Excellon Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Excellon Resources 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 Excellon Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Excellon Resources has no effect on the direction of Ford i.e., Ford and Excellon Resources go up and down completely randomly.
Pair Corralation between Ford and Excellon Resources
If you would invest 1,022 in Ford Motor on September 3, 2024 and sell it today you would earn a total of 91.00 from holding Ford Motor or generate 8.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 5.0% |
| Values | Daily Returns |
Ford Motor vs. Excellon Resources
Performance |
| Timeline |
| Ford Motor |
| Excellon Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ford and Excellon Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Excellon Resources
The main advantage of trading using opposite Ford and Excellon Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Excellon Resources 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 Excellon Resources will offset losses from the drop in Excellon Resources' long position.| Ford vs. GreenPower Motor | Ford vs. ZEEKR Intelligent Technology | Ford vs. Volcon Inc | Ford vs. Ford Motor |
| Excellon Resources vs. Arrow Electronics | Excellon Resources vs. Diageo PLC ADR | Excellon Resources vs. Uber Technologies | Excellon Resources vs. Western Acquisition Ventures |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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