Correlation Between Ford and Harbor High-yield
Can any of the company-specific risk be diversified away by investing in both Ford and Harbor High-yield 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 Harbor High-yield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Harbor High Yield Bond, you can compare the effects of market volatilities on Ford and Harbor High-yield 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 Harbor High-yield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Harbor High-yield.
Diversification Opportunities for Ford and Harbor High-yield
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ford and Harbor is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Harbor High Yield Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor High Yield 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 Harbor High-yield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor High Yield has no effect on the direction of Ford i.e., Ford and Harbor High-yield go up and down completely randomly.
Pair Corralation between Ford and Harbor High-yield
If you would invest 1,015 in Ford Motor on September 1, 2024 and sell it today you would earn a total of 98.00 from holding Ford Motor or generate 9.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Ford Motor vs. Harbor High Yield Bond
Performance |
| Timeline |
| Ford Motor |
| Harbor High Yield |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ford and Harbor High-yield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Harbor High-yield
The main advantage of trading using opposite Ford and Harbor High-yield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Harbor High-yield 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 Harbor High-yield will offset losses from the drop in Harbor High-yield's long position.The idea behind Ford Motor and Harbor High Yield Bond 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.| Harbor High-yield vs. Chartwell Small Cap | Harbor High-yield vs. The Hartford Small | Harbor High-yield vs. Touchstone Small Cap | Harbor High-yield vs. Small Pany Growth |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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