Correlation Between Ford and MamaMancinis Holdings
Can any of the company-specific risk be diversified away by investing in both Ford and MamaMancinis Holdings 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 MamaMancinis Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and MamaMancinis Holdings, you can compare the effects of market volatilities on Ford and MamaMancinis Holdings 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 MamaMancinis Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and MamaMancinis Holdings.
Diversification Opportunities for Ford and MamaMancinis Holdings
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ford and MamaMancinis is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and MamaMancinis Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MamaMancinis Holdings 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 MamaMancinis Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MamaMancinis Holdings has no effect on the direction of Ford i.e., Ford and MamaMancinis Holdings go up and down completely randomly.
Pair Corralation between Ford and MamaMancinis Holdings
If you would invest 1,122 in Ford Motor on August 27, 2024 and sell it today you would lose (4.00) from holding Ford Motor or give up 0.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Ford Motor vs. MamaMancinis Holdings
Performance |
| Timeline |
| Ford Motor |
| MamaMancinis Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ford and MamaMancinis Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and MamaMancinis Holdings
The main advantage of trading using opposite Ford and MamaMancinis Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, MamaMancinis Holdings 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 MamaMancinis Holdings will offset losses from the drop in MamaMancinis Holdings' long position.The idea behind Ford Motor and MamaMancinis Holdings 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.| MamaMancinis Holdings vs. Seneca Foods Corp | MamaMancinis Holdings vs. Central Garden Pet | MamaMancinis Holdings vs. Central Garden Pet | MamaMancinis Holdings vs. Natures Sunshine Products |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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