Correlation Between Ford and Gungnir Resources
Can any of the company-specific risk be diversified away by investing in both Ford and Gungnir Resources 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 Gungnir Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Gungnir Resources, you can compare the effects of market volatilities on Ford and Gungnir Resources 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 Gungnir Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Gungnir Resources.
Diversification Opportunities for Ford and Gungnir Resources
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ford and Gungnir is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Gungnir Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gungnir Resources 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 Gungnir Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gungnir Resources has no effect on the direction of Ford i.e., Ford and Gungnir Resources go up and down completely randomly.
Pair Corralation between Ford and Gungnir Resources
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Gungnir Resources. But the stock apears to be less risky and, when comparing its historical volatility, Ford Motor is 4.77 times less risky than Gungnir Resources. The stock trades about -0.01 of its potential returns per unit of risk. The Gungnir Resources is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 4.00 in Gungnir Resources on August 29, 2024 and sell it today you would lose (1.50) from holding Gungnir Resources or give up 37.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Ford Motor vs. Gungnir Resources
Performance |
| Timeline |
| Ford Motor |
| Gungnir Resources |
Ford and Gungnir Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Gungnir Resources
The main advantage of trading using opposite Ford and Gungnir Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Gungnir Resources 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 Gungnir Resources will offset losses from the drop in Gungnir Resources' long position.The idea behind Ford Motor and Gungnir Resources 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.| Gungnir Resources vs. Hawkeye Gold and | Gungnir Resources vs. ExGen Resources | Gungnir Resources vs. Inventus Mining Corp | Gungnir Resources vs. Gunpoint Exploration |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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