Correlation Between Ford and Mirvac
Can any of the company-specific risk be diversified away by investing in both Ford and Mirvac 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 Mirvac into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Mirvac Group, you can compare the effects of market volatilities on Ford and Mirvac 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 Mirvac. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Mirvac.
Diversification Opportunities for Ford and Mirvac
Good diversification
The 3 months correlation between Ford and Mirvac is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Mirvac Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mirvac Group 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 Mirvac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mirvac Group has no effect on the direction of Ford i.e., Ford and Mirvac go up and down completely randomly.
Pair Corralation between Ford and Mirvac
Taking into account the 90-day investment horizon Ford Motor is expected to generate 2.61 times more return on investment than Mirvac. However, Ford is 2.61 times more volatile than Mirvac Group. It trades about 0.22 of its potential returns per unit of risk. Mirvac Group is currently generating about -0.04 per unit of risk. If you would invest 1,022 in Ford Motor on September 3, 2024 and sell it today you would earn a total of 91.00 from holding Ford Motor or generate 8.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Ford Motor vs. Mirvac Group
Performance |
| Timeline |
| Ford Motor |
| Mirvac Group |
Ford and Mirvac Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Mirvac
The main advantage of trading using opposite Ford and Mirvac positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Mirvac 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 Mirvac will offset losses from the drop in Mirvac's long position.| Ford vs. GreenPower Motor | Ford vs. ZEEKR Intelligent Technology | Ford vs. Volcon Inc | Ford vs. Ford Motor |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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