Correlation Between Ford and Great Lakes
Can any of the company-specific risk be diversified away by investing in both Ford and Great Lakes 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 Great Lakes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Great Lakes Large, you can compare the effects of market volatilities on Ford and Great Lakes 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 Great Lakes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Great Lakes.
Diversification Opportunities for Ford and Great Lakes
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ford and Great is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Great Lakes Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Lakes Large 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 Great Lakes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Lakes Large has no effect on the direction of Ford i.e., Ford and Great Lakes go up and down completely randomly.
Pair Corralation between Ford and Great Lakes
If you would invest 961.00 in Ford Motor on September 13, 2024 and sell it today you would earn a total of 78.00 from holding Ford Motor or generate 8.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.85% |
| Values | Daily Returns |
Ford Motor vs. Great Lakes Large
Performance |
| Timeline |
| Ford Motor |
| Great Lakes Large |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ford and Great Lakes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Great Lakes
The main advantage of trading using opposite Ford and Great Lakes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Great Lakes 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 Great Lakes will offset losses from the drop in Great Lakes' long position.The idea behind Ford Motor and Great Lakes Large 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.| Great Lakes vs. Allianzgi Health Sciences | Great Lakes vs. Baillie Gifford Health | Great Lakes vs. Tekla Healthcare Opportunities | Great Lakes vs. Baron Health Care |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |