Correlation Between Ford and State Street
Can any of the company-specific risk be diversified away by investing in both Ford and State Street 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 State Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and State Street, you can compare the effects of market volatilities on Ford and State Street 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 State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and State Street.
Diversification Opportunities for Ford and State Street
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ford and State is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and State Street in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street 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 State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street has no effect on the direction of Ford i.e., Ford and State Street go up and down completely randomly.
Pair Corralation between Ford and State Street
If you would invest 1,119 in Ford Motor on September 3, 2024 and sell it today you would lose (6.00) from holding Ford Motor or give up 0.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Ford Motor vs. State Street
Performance |
| Timeline |
| Ford Motor |
| State Street |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ford and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and State Street
The main advantage of trading using opposite Ford and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, State Street 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 State Street will offset losses from the drop in State Street's long position.The idea behind Ford Motor and State Street 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.| State Street vs. FT Vest Equity | State Street vs. Zillow Group Class | State Street vs. Northern Lights | State Street vs. VanEck Vectors Moodys |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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