Correlation Between Ford and Loncor Gold
Can any of the company-specific risk be diversified away by investing in both Ford and Loncor 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 Loncor 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 Loncor Gold, you can compare the effects of market volatilities on Ford and Loncor 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 Loncor Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Loncor Gold.
Diversification Opportunities for Ford and Loncor Gold
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and Loncor is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Loncor Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loncor Gold 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 Loncor Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loncor Gold has no effect on the direction of Ford i.e., Ford and Loncor Gold go up and down completely randomly.
Pair Corralation between Ford and Loncor Gold
Taking into account the 90-day investment horizon Ford is expected to generate 4.15 times less return on investment than Loncor Gold. But when comparing it to its historical volatility, Ford Motor is 2.08 times less risky than Loncor Gold. It trades about 0.01 of its potential returns per unit of risk. Loncor Gold is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 26.00 in Loncor Gold on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Loncor Gold or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 31.11% |
| Values | Daily Returns |
Ford Motor vs. Loncor Gold
Performance |
| Timeline |
| Ford Motor |
| Loncor Gold |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ford and Loncor Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Loncor Gold
The main advantage of trading using opposite Ford and Loncor Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Loncor 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 Loncor Gold will offset losses from the drop in Loncor Gold's long position.The idea behind Ford Motor and Loncor Gold 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.| Loncor Gold vs. Galiano Gold | Loncor Gold vs. Brunswick Exploration | Loncor Gold vs. B2Gold Corp | Loncor Gold vs. Japan Gold Corp |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |