Correlation Between Ford and Henderson Global
Can any of the company-specific risk be diversified away by investing in both Ford and Henderson Global 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 Henderson Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Henderson Global Equity, you can compare the effects of market volatilities on Ford and Henderson Global 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 Henderson Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Henderson Global.
Diversification Opportunities for Ford and Henderson Global
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and Henderson is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Henderson Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henderson Global Equity 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 Henderson Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Henderson Global Equity has no effect on the direction of Ford i.e., Ford and Henderson Global go up and down completely randomly.
Pair Corralation between Ford and Henderson Global
Taking into account the 90-day investment horizon Ford is expected to generate 1.96 times less return on investment than Henderson Global. In addition to that, Ford is 3.45 times more volatile than Henderson Global Equity. It trades about 0.01 of its total potential returns per unit of risk. Henderson Global Equity is currently generating about 0.05 per unit of volatility. If you would invest 533.00 in Henderson Global Equity on September 3, 2024 and sell it today you would earn a total of 95.00 from holding Henderson Global Equity or generate 17.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Henderson Global Equity
Performance |
| Timeline |
| Ford Motor |
| Henderson Global Equity |
Ford and Henderson Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Henderson Global
The main advantage of trading using opposite Ford and Henderson Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Henderson Global 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 Henderson Global will offset losses from the drop in Henderson Global's long position.| Ford vs. GreenPower Motor | Ford vs. ZEEKR Intelligent Technology | Ford vs. Volcon Inc | Ford vs. Ford Motor |
| Henderson Global vs. Oakmark International Fund | Henderson Global vs. Dodge International Stock | Henderson Global vs. Oakmark International Fund | Henderson Global vs. Oakmark International Fund |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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