Correlation Between Ford and Goodfood Market
Can any of the company-specific risk be diversified away by investing in both Ford and Goodfood Market 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 Goodfood Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Goodfood Market Corp, you can compare the effects of market volatilities on Ford and Goodfood Market 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 Goodfood Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Goodfood Market.
Diversification Opportunities for Ford and Goodfood Market
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ford and Goodfood is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Goodfood Market Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodfood Market Corp 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 Goodfood Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodfood Market Corp has no effect on the direction of Ford i.e., Ford and Goodfood Market go up and down completely randomly.
Pair Corralation between Ford and Goodfood Market
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.62 times more return on investment than Goodfood Market. However, Ford Motor is 1.61 times less risky than Goodfood Market. It trades about 0.01 of its potential returns per unit of risk. Goodfood Market Corp is currently generating about 0.01 per unit of risk. If you would invest 1,132 in Ford Motor on August 25, 2024 and sell it today you would lose (14.00) from holding Ford Motor or give up 1.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Ford Motor vs. Goodfood Market Corp
Performance |
| Timeline |
| Ford Motor |
| Goodfood Market Corp |
Ford and Goodfood Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Goodfood Market
The main advantage of trading using opposite Ford and Goodfood Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Goodfood Market 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 Goodfood Market will offset losses from the drop in Goodfood Market's long position.The idea behind Ford Motor and Goodfood Market Corp 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.| Goodfood Market vs. Frontdoor | Goodfood Market vs. Regis Common | Goodfood Market vs. XWELL Inc | Goodfood Market vs. GD Entertainment Technology |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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