Correlation Between Ford and Hays PLC
Can any of the company-specific risk be diversified away by investing in both Ford and Hays PLC 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 Hays PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Hays PLC ADR, you can compare the effects of market volatilities on Ford and Hays PLC 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 Hays PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Hays PLC.
Diversification Opportunities for Ford and Hays PLC
Average diversification
The 3 months correlation between Ford and Hays is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Hays PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hays PLC ADR 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 Hays PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hays PLC ADR has no effect on the direction of Ford i.e., Ford and Hays PLC go up and down completely randomly.
Pair Corralation between Ford and Hays PLC
If you would invest 1,206 in Hays PLC ADR on September 15, 2024 and sell it today you would earn a total of 0.00 from holding Hays PLC ADR or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Ford Motor vs. Hays PLC ADR
Performance |
| Timeline |
| Ford Motor |
| Hays PLC ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ford and Hays PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Hays PLC
The main advantage of trading using opposite Ford and Hays PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Hays PLC 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 Hays PLC will offset losses from the drop in Hays PLC's long position.The idea behind Ford Motor and Hays PLC ADR 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.| Hays PLC vs. Randstad Holdings NV | Hays PLC vs. Kforce Inc | Hays PLC vs. Recruit Holdings Co | Hays PLC vs. Kelly Services A |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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