Correlation Between Ford and Intrepid Income
Can any of the company-specific risk be diversified away by investing in both Ford and Intrepid Income 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 Intrepid Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Intrepid Income Fund, you can compare the effects of market volatilities on Ford and Intrepid Income 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 Intrepid Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Intrepid Income.
Diversification Opportunities for Ford and Intrepid Income
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ford and INTREPID is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Intrepid Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intrepid Income 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 Intrepid Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intrepid Income has no effect on the direction of Ford i.e., Ford and Intrepid Income go up and down completely randomly.
Pair Corralation between Ford and Intrepid Income
Taking into account the 90-day investment horizon Ford Motor is expected to generate 13.4 times more return on investment than Intrepid Income. However, Ford is 13.4 times more volatile than Intrepid Income Fund. It trades about 0.25 of its potential returns per unit of risk. Intrepid Income Fund is currently generating about 0.18 per unit of risk. If you would invest 1,008 in Ford Motor on September 2, 2024 and sell it today you would earn a total of 105.00 from holding Ford Motor or generate 10.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Intrepid Income Fund
Performance |
| Timeline |
| Ford Motor |
| Intrepid Income |
Ford and Intrepid Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Intrepid Income
The main advantage of trading using opposite Ford and Intrepid Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Intrepid Income 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 Intrepid Income will offset losses from the drop in Intrepid Income's long position.The idea behind Ford Motor and Intrepid Income Fund 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.| Intrepid Income vs. Intrepid Capital Fund | Intrepid Income vs. Intrepid Endurance Fund | Intrepid Income vs. Intrepid Endurance Fund | Intrepid Income vs. Intrepid Capital 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |