Correlation Between Ford and Lumina Gold
Can any of the company-specific risk be diversified away by investing in both Ford and Lumina Gold 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 Lumina Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Lumina Gold Corp, you can compare the effects of market volatilities on Ford and Lumina Gold 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 Lumina Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Lumina Gold.
Diversification Opportunities for Ford and Lumina Gold
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ford and Lumina is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Lumina Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lumina Gold Corp 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 Lumina Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lumina Gold Corp has no effect on the direction of Ford i.e., Ford and Lumina Gold go up and down completely randomly.
Pair Corralation between Ford and Lumina Gold
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.7 times more return on investment than Lumina Gold. However, Ford Motor is 1.42 times less risky than Lumina Gold. It trades about 0.0 of its potential returns per unit of risk. Lumina Gold Corp is currently generating about 0.0 per unit of risk. If you would invest 1,173 in Ford Motor on September 3, 2024 and sell it today you would lose (60.00) from holding Ford Motor or give up 5.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Lumina Gold Corp
Performance |
| Timeline |
| Ford Motor |
| Lumina Gold Corp |
Ford and Lumina Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Lumina Gold
The main advantage of trading using opposite Ford and Lumina Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Lumina Gold 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 Lumina Gold will offset losses from the drop in Lumina Gold's long position.| Ford vs. GreenPower Motor | Ford vs. ZEEKR Intelligent Technology | Ford vs. Volcon Inc | Ford vs. Ford Motor |
| Lumina Gold vs. Harmony Gold Mining | Lumina Gold vs. SPACE | Lumina Gold vs. T Rowe Price | Lumina Gold vs. Ampleforth |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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