Correlation Between Ford and VanEck Gold
Can any of the company-specific risk be diversified away by investing in both Ford and VanEck Gold 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 VanEck Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and VanEck Gold Miners, you can compare the effects of market volatilities on Ford and VanEck Gold 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 VanEck Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and VanEck Gold.
Diversification Opportunities for Ford and VanEck Gold
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ford and VanEck is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and VanEck Gold Miners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Gold Miners 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 VanEck Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Gold Miners has no effect on the direction of Ford i.e., Ford and VanEck Gold go up and down completely randomly.
Pair Corralation between Ford and VanEck Gold
Taking into account the 90-day investment horizon Ford is expected to generate 2.98 times less return on investment than VanEck Gold. In addition to that, Ford is 1.26 times more volatile than VanEck Gold Miners. It trades about 0.01 of its total potential returns per unit of risk. VanEck Gold Miners is currently generating about 0.03 per unit of volatility. If you would invest 2,952 in VanEck Gold Miners on September 3, 2024 and sell it today you would earn a total of 746.00 from holding VanEck Gold Miners or generate 25.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Ford Motor vs. VanEck Gold Miners
Performance |
| Timeline |
| Ford Motor |
| VanEck Gold Miners |
Ford and VanEck Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and VanEck Gold
The main advantage of trading using opposite Ford and VanEck Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, VanEck Gold 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 VanEck Gold will offset losses from the drop in VanEck Gold's long position.| Ford vs. GreenPower Motor | Ford vs. ZEEKR Intelligent Technology | Ford vs. Volcon Inc | Ford vs. Ford Motor |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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