Correlation Between Ford and COSCO SHIPPING
Can any of the company-specific risk be diversified away by investing in both Ford and COSCO SHIPPING 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 COSCO SHIPPING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and COSCO SHIPPING Energy, you can compare the effects of market volatilities on Ford and COSCO SHIPPING 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 COSCO SHIPPING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and COSCO SHIPPING.
Diversification Opportunities for Ford and COSCO SHIPPING
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ford and COSCO is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and COSCO SHIPPING Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSCO SHIPPING Energy 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 COSCO SHIPPING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSCO SHIPPING Energy has no effect on the direction of Ford i.e., Ford and COSCO SHIPPING go up and down completely randomly.
Pair Corralation between Ford and COSCO SHIPPING
Taking into account the 90-day investment horizon Ford is expected to generate 12.52 times less return on investment than COSCO SHIPPING. But when comparing it to its historical volatility, Ford Motor is 1.82 times less risky than COSCO SHIPPING. It trades about 0.01 of its potential returns per unit of risk. COSCO SHIPPING Energy is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 34.00 in COSCO SHIPPING Energy on September 3, 2024 and sell it today you would earn a total of 37.00 from holding COSCO SHIPPING Energy or generate 108.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.02% |
| Values | Daily Returns |
Ford Motor vs. COSCO SHIPPING Energy
Performance |
| Timeline |
| Ford Motor |
| COSCO SHIPPING Energy |
Ford and COSCO SHIPPING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and COSCO SHIPPING
The main advantage of trading using opposite Ford and COSCO SHIPPING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, COSCO SHIPPING 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 COSCO SHIPPING will offset losses from the drop in COSCO SHIPPING's long position.| Ford vs. GreenPower Motor | Ford vs. ZEEKR Intelligent Technology | Ford vs. Volcon Inc | Ford vs. Ford Motor |
| COSCO SHIPPING vs. Qingdao Port International | COSCO SHIPPING vs. Liaoning Port CoLtd | COSCO SHIPPING vs. Superior Plus Corp | COSCO SHIPPING vs. NMI Holdings |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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