Correlation Between Ford and Focus Impact
Can any of the company-specific risk be diversified away by investing in both Ford and Focus Impact 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 Focus Impact into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Focus Impact Acquisition, you can compare the effects of market volatilities on Ford and Focus Impact 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 Focus Impact. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Focus Impact.
Diversification Opportunities for Ford and Focus Impact
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and Focus is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Focus Impact Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Focus Impact Acquisition 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 Focus Impact. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Focus Impact Acquisition has no effect on the direction of Ford i.e., Ford and Focus Impact go up and down completely randomly.
Pair Corralation between Ford and Focus Impact
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.06 times more return on investment than Focus Impact. However, Ford Motor is 17.29 times less risky than Focus Impact. It trades about 0.04 of its potential returns per unit of risk. Focus Impact Acquisition is currently generating about -0.09 per unit of risk. If you would invest 1,122 in Ford Motor on August 28, 2024 and sell it today you would earn a total of 18.00 from holding Ford Motor or generate 1.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 47.62% |
| Values | Daily Returns |
Ford Motor vs. Focus Impact Acquisition
Performance |
| Timeline |
| Ford Motor |
| Focus Impact Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ford and Focus Impact Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Focus Impact
The main advantage of trading using opposite Ford and Focus Impact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Focus Impact 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 Focus Impact will offset losses from the drop in Focus Impact's long position.The idea behind Ford Motor and Focus Impact Acquisition 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.| Focus Impact vs. ClimateRock Class A | Focus Impact vs. AlphaVest Acquisition Corp | Focus Impact vs. Golden Star Acquisition | Focus Impact vs. Portage Fintech Acquisition |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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