Correlation Between Ford and JS Global

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Can any of the company-specific risk be diversified away by investing in both Ford and JS Global 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 JS Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and JS Global Banking, you can compare the effects of market volatilities on Ford and JS Global 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 JS Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and JS Global.

Diversification Opportunities for Ford and JS Global

FordJSGBETFDiversified AwayFordJSGBETFDiversified Away100%
-0.05
  Correlation Coefficient

Good diversification

The 3 months correlation between Ford and JSGBETF is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and JS Global Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JS Global Banking 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 JS Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JS Global Banking has no effect on the direction of Ford i.e., Ford and JS Global go up and down completely randomly.

Pair Corralation between Ford and JS Global

Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.74 times more return on investment than JS Global. However, Ford Motor is 1.36 times less risky than JS Global. It trades about -0.02 of its potential returns per unit of risk. JS Global Banking is currently generating about -0.05 per unit of risk. If you would invest  959.00  in Ford Motor on November 23, 2024 and sell it today you would lose (20.00) from holding Ford Motor or give up 2.09% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Ford Motor  vs.  JS Global Banking

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -1001020
JavaScript chart by amCharts 3.21.15F JSGBETF
       Timeline  
Ford Motor 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Ford Motor has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb99.51010.511
JS Global Banking 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days JS Global Banking has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, JS Global is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb2021222324

Ford and JS Global Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.08-2.31-1.53-0.760.01160.71.392.092.79 0.040.060.080.100.12
JavaScript chart by amCharts 3.21.15F JSGBETF
       Returns  

Pair Trading with Ford and JS Global

The main advantage of trading using opposite Ford and JS Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, JS Global 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 JS Global will offset losses from the drop in JS Global's long position.
The idea behind Ford Motor and JS Global Banking 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.
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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