Correlation Between Ford and JD Health
Can any of the company-specific risk be diversified away by investing in both Ford and JD Health 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 JD Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and JD Health International, you can compare the effects of market volatilities on Ford and JD Health 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 JD Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and JD Health.
Diversification Opportunities for Ford and JD Health
Very weak diversification
The 3 months correlation between Ford and JDHIY is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and JD Health International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD Health International 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 JD Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JD Health International has no effect on the direction of Ford i.e., Ford and JD Health go up and down completely randomly.
Pair Corralation between Ford and JD Health
Taking into account the 90-day investment horizon Ford Motor is expected to generate 1.05 times more return on investment than JD Health. However, Ford is 1.05 times more volatile than JD Health International. It trades about 0.01 of its potential returns per unit of risk. JD Health International is currently generating about -0.09 per unit of risk. If you would invest 1,148 in Ford Motor on September 3, 2024 and sell it today you would lose (35.00) from holding Ford Motor or give up 3.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. JD Health International
Performance |
| Timeline |
| Ford Motor |
| JD Health International |
Ford and JD Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and JD Health
The main advantage of trading using opposite Ford and JD Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, JD Health 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 JD Health will offset losses from the drop in JD Health's long position.| Ford vs. GreenPower Motor | Ford vs. ZEEKR Intelligent Technology | Ford vs. Volcon Inc | Ford vs. ECD Automotive Design |
| JD Health vs. Pennant Group | JD Health vs. Encompass Health Corp | JD Health vs. Enhabit | JD Health vs. Concord Medical Services |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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