Correlation Between Ford and Hartford
Can any of the company-specific risk be diversified away by investing in both Ford and Hartford 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 Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Hartford, you can compare the effects of market volatilities on Ford and Hartford 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 Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Hartford.
Diversification Opportunities for Ford and Hartford
Pay attention - limited upside
The 3 months correlation between Ford and Hartford is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Hartford in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford 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 Hartford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford has no effect on the direction of Ford i.e., Ford and Hartford go up and down completely randomly.
Pair Corralation between Ford and Hartford
If you would invest 907.00 in Ford Motor on September 4, 2024 and sell it today you would earn a total of 191.00 from holding Ford Motor or generate 21.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Ford Motor vs. Hartford
Performance |
| Timeline |
| Ford Motor |
| Hartford |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ford and Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Hartford
The main advantage of trading using opposite Ford and Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Hartford 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 Hartford will offset losses from the drop in Hartford's long position.The idea behind Ford Motor and Hartford 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.| Hartford vs. iShares Core SP | Hartford vs. iShares Core 1 5 | Hartford vs. iShares Core MSCI | Hartford vs. iShares Core MSCI |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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