Correlation Between Ford and Huber Capital
Can any of the company-specific risk be diversified away by investing in both Ford and Huber Capital 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 Huber Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Huber Capital Mid, you can compare the effects of market volatilities on Ford and Huber Capital 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 Huber Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Huber Capital.
Diversification Opportunities for Ford and Huber Capital
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ford and Huber is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Huber Capital Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huber Capital Mid 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 Huber Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huber Capital Mid has no effect on the direction of Ford i.e., Ford and Huber Capital go up and down completely randomly.
Pair Corralation between Ford and Huber Capital
Taking into account the 90-day investment horizon Ford Motor is expected to generate 1.94 times more return on investment than Huber Capital. However, Ford is 1.94 times more volatile than Huber Capital Mid. It trades about -0.1 of its potential returns per unit of risk. Huber Capital Mid is currently generating about -0.27 per unit of risk. If you would invest 976.00 in Ford Motor on November 29, 2024 and sell it today you would lose (46.50) from holding Ford Motor or give up 4.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Huber Capital Mid
Performance |
| Timeline |
| Ford Motor |
| Huber Capital Mid |
Ford and Huber Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Huber Capital
The main advantage of trading using opposite Ford and Huber Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Huber Capital 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 Huber Capital will offset losses from the drop in Huber Capital's long position.The idea behind Ford Motor and Huber Capital Mid 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.| Huber Capital vs. Franklin Lifesmart Retirement | Huber Capital vs. Jp Morgan Smartretirement | Huber Capital vs. College Retirement Equities | Huber Capital vs. Voya Target Retirement |
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 Managers module to screen money managers from public funds and ETFs managed around the world.
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