Correlation Between Ford and ICE Treasury
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By analyzing existing cross correlation between Ford Motor and ICE Treasury Core, you can compare the effects of market volatilities on Ford and ICE Treasury 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 ICE Treasury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and ICE Treasury.
Diversification Opportunities for Ford and ICE Treasury
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and ICE is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and ICE Treasury Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICE Treasury Core 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 ICE Treasury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICE Treasury Core has no effect on the direction of Ford i.e., Ford and ICE Treasury go up and down completely randomly.
Pair Corralation between Ford and ICE Treasury
Taking into account the 90-day investment horizon Ford Motor is expected to generate 5.93 times more return on investment than ICE Treasury. However, Ford is 5.93 times more volatile than ICE Treasury Core. It trades about 0.01 of its potential returns per unit of risk. ICE Treasury Core is currently generating about 0.03 per unit of risk. If you would invest 1,115 in Ford Motor on August 30, 2024 and sell it today you would lose (5.00) from holding Ford Motor or give up 0.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. ICE Treasury Core
Performance |
| Timeline |
Ford and ICE Treasury Volatility Contrast
Predicted Return Density |
| Returns |
Ford Motor
Pair trading matchups for Ford
ICE Treasury Core
Pair trading matchups for ICE Treasury
Pair Trading with Ford and ICE Treasury
The main advantage of trading using opposite Ford and ICE Treasury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, ICE Treasury 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 ICE Treasury will offset losses from the drop in ICE Treasury's long position.The idea behind Ford Motor and ICE Treasury Core 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.| ICE Treasury vs. ArcelorMittal SA ADR | ICE Treasury vs. Dine Brands Global | ICE Treasury vs. Sanyo Special Steel | ICE Treasury vs. Grupo Simec SAB |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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