Correlation Between Ford and Morguard Real
Can any of the company-specific risk be diversified away by investing in both Ford and Morguard Real 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 Morguard Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Morguard Real Estate, you can compare the effects of market volatilities on Ford and Morguard Real 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 Morguard Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Morguard Real.
Diversification Opportunities for Ford and Morguard Real
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ford and Morguard is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Morguard Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morguard Real Estate 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 Morguard Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morguard Real Estate has no effect on the direction of Ford i.e., Ford and Morguard Real go up and down completely randomly.
Pair Corralation between Ford and Morguard Real
Taking into account the 90-day investment horizon Ford Motor is expected to generate 1.46 times more return on investment than Morguard Real. However, Ford is 1.46 times more volatile than Morguard Real Estate. It trades about 0.25 of its potential returns per unit of risk. Morguard Real Estate is currently generating about -0.12 per unit of risk. If you would invest 1,008 in Ford Motor on September 2, 2024 and sell it today you would earn a total of 105.00 from holding Ford Motor or generate 10.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ford Motor vs. Morguard Real Estate
Performance |
| Timeline |
| Ford Motor |
| Morguard Real Estate |
Ford and Morguard Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Morguard Real
The main advantage of trading using opposite Ford and Morguard Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Morguard Real 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 Morguard Real will offset losses from the drop in Morguard Real's long position.The idea behind Ford Motor and Morguard Real Estate 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.| Morguard Real vs. Morguard North American | Morguard Real vs. Crombie Real Estate | Morguard Real vs. Artis Real Estate | Morguard Real vs. Slate Office REIT |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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