Correlation Between Ford and Mayfair Gold
Can any of the company-specific risk be diversified away by investing in both Ford and Mayfair 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 Mayfair 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 Mayfair Gold Corp, you can compare the effects of market volatilities on Ford and Mayfair 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 Mayfair Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Mayfair Gold.
Diversification Opportunities for Ford and Mayfair Gold
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ford and Mayfair is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Mayfair Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mayfair 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 Mayfair Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mayfair Gold Corp has no effect on the direction of Ford i.e., Ford and Mayfair Gold go up and down completely randomly.
Pair Corralation between Ford and Mayfair Gold
Taking into account the 90-day investment horizon Ford is expected to generate 1.85 times less return on investment than Mayfair Gold. But when comparing it to its historical volatility, Ford Motor is 1.27 times less risky than Mayfair Gold. It trades about 0.03 of its potential returns per unit of risk. Mayfair Gold Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 180.00 in Mayfair Gold Corp on September 2, 2024 and sell it today you would earn a total of 10.00 from holding Mayfair Gold Corp or generate 5.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Mayfair Gold Corp
Performance |
| Timeline |
| Ford Motor |
| Mayfair Gold Corp |
Ford and Mayfair Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Mayfair Gold
The main advantage of trading using opposite Ford and Mayfair Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Mayfair 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 Mayfair Gold will offset losses from the drop in Mayfair Gold's long position.The idea behind Ford Motor and Mayfair Gold Corp 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.| Mayfair Gold vs. First Majestic Silver | Mayfair Gold vs. Ivanhoe Energy | Mayfair Gold vs. Orezone 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |