Correlation Between Ford and Ichor Coal
Can any of the company-specific risk be diversified away by investing in both Ford and Ichor Coal 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 Ichor Coal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Ichor Coal NV, you can compare the effects of market volatilities on Ford and Ichor Coal 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 Ichor Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Ichor Coal.
Diversification Opportunities for Ford and Ichor Coal
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ford and Ichor is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Ichor Coal NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ichor Coal NV 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 Ichor Coal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ichor Coal NV has no effect on the direction of Ford i.e., Ford and Ichor Coal go up and down completely randomly.
Pair Corralation between Ford and Ichor Coal
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.8 times more return on investment than Ichor Coal. However, Ford Motor is 1.25 times less risky than Ichor Coal. It trades about 0.02 of its potential returns per unit of risk. Ichor Coal NV is currently generating about -0.16 per unit of risk. If you would invest 1,029 in Ford Motor on September 3, 2024 and sell it today you would earn a total of 69.00 from holding Ford Motor or generate 6.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Ford Motor vs. Ichor Coal NV
Performance |
| Timeline |
| Ford Motor |
| Ichor Coal NV |
Ford and Ichor Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Ichor Coal
The main advantage of trading using opposite Ford and Ichor Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Ichor Coal 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 Ichor Coal will offset losses from the drop in Ichor Coal's long position.| Ford vs. GreenPower Motor | Ford vs. ZEEKR Intelligent Technology | Ford vs. Volcon Inc | Ford vs. Ford Motor |
| Ichor Coal vs. INTER CARS SA | Ichor Coal vs. CarsalesCom | Ichor Coal vs. MagnaChip Semiconductor Corp | Ichor Coal vs. AECOM TECHNOLOGY |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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