Correlation Between Ford and Foresight Autonomous
Can any of the company-specific risk be diversified away by investing in both Ford and Foresight Autonomous 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 Foresight Autonomous into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Foresight Autonomous Holdings, you can compare the effects of market volatilities on Ford and Foresight Autonomous 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 Foresight Autonomous. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Foresight Autonomous.
Diversification Opportunities for Ford and Foresight Autonomous
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ford and Foresight is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Foresight Autonomous Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foresight Autonomous 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 Foresight Autonomous. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foresight Autonomous has no effect on the direction of Ford i.e., Ford and Foresight Autonomous go up and down completely randomly.
Pair Corralation between Ford and Foresight Autonomous
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.61 times more return on investment than Foresight Autonomous. However, Ford Motor is 1.65 times less risky than Foresight Autonomous. It trades about 0.08 of its potential returns per unit of risk. Foresight Autonomous Holdings is currently generating about -0.05 per unit of risk. If you would invest 1,042 in Ford Motor on August 30, 2024 and sell it today you would earn a total of 68.00 from holding Ford Motor or generate 6.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Foresight Autonomous Holdings
Performance |
| Timeline |
| Ford Motor |
| Foresight Autonomous |
Ford and Foresight Autonomous Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Foresight Autonomous
The main advantage of trading using opposite Ford and Foresight Autonomous positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Foresight Autonomous 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 Foresight Autonomous will offset losses from the drop in Foresight Autonomous' long position.The idea behind Ford Motor and Foresight Autonomous Holdings 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.| Foresight Autonomous vs. Ford Motor | Foresight Autonomous vs. General Motors | Foresight Autonomous vs. Goodyear Tire Rubber | Foresight Autonomous vs. Li Auto |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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