Correlation Between Ford and Greatland Gold
Can any of the company-specific risk be diversified away by investing in both Ford and Greatland 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 Greatland 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 Greatland Gold plc, you can compare the effects of market volatilities on Ford and Greatland 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 Greatland Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Greatland Gold.
Diversification Opportunities for Ford and Greatland Gold
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ford and Greatland is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Greatland Gold plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greatland Gold plc 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 Greatland Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greatland Gold plc has no effect on the direction of Ford i.e., Ford and Greatland Gold go up and down completely randomly.
Pair Corralation between Ford and Greatland Gold
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.56 times more return on investment than Greatland Gold. However, Ford Motor is 1.78 times less risky than Greatland Gold. It trades about 0.02 of its potential returns per unit of risk. Greatland Gold plc is currently generating about -0.01 per unit of risk. If you would invest 1,029 in Ford Motor on September 3, 2024 and sell it today you would earn a total of 69.00 from holding Ford Motor or generate 6.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Ford Motor vs. Greatland Gold plc
Performance |
| Timeline |
| Ford Motor |
| Greatland Gold plc |
Ford and Greatland Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Greatland Gold
The main advantage of trading using opposite Ford and Greatland Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Greatland 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 Greatland Gold will offset losses from the drop in Greatland Gold's long position.| Ford vs. GreenPower Motor | Ford vs. ZEEKR Intelligent Technology | Ford vs. Volcon Inc | Ford vs. Ford Motor |
| Greatland Gold vs. Fonix Mobile plc | Greatland Gold vs. Charter Communications Cl | Greatland Gold vs. Infrastrutture Wireless Italiane | Greatland Gold vs. Cairo Communication SpA |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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