Correlation Between Ford and FNB ETN
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By analyzing existing cross correlation between Ford Motor and FNB ETN on, you can compare the effects of market volatilities on Ford and FNB ETN 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 FNB ETN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and FNB ETN.
Diversification Opportunities for Ford and FNB ETN
Weak diversification
The 3 months correlation between Ford and FNB is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and FNB ETN on in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNB ETN on 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 FNB ETN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FNB ETN on has no effect on the direction of Ford i.e., Ford and FNB ETN go up and down completely randomly.
Pair Corralation between Ford and FNB ETN
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the FNB ETN. In addition to that, Ford is 2.17 times more volatile than FNB ETN on. It trades about 0.0 of its total potential returns per unit of risk. FNB ETN on is currently generating about 0.11 per unit of volatility. If you would invest 125,000 in FNB ETN on on August 31, 2024 and sell it today you would earn a total of 43,300 from holding FNB ETN on or generate 34.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 75.13% |
| Values | Daily Returns |
Ford Motor vs. FNB ETN on
Performance |
| Timeline |
| Ford Motor |
| FNB ETN on |
Ford and FNB ETN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and FNB ETN
The main advantage of trading using opposite Ford and FNB ETN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, FNB ETN 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 FNB ETN will offset losses from the drop in FNB ETN's long position.The idea behind Ford Motor and FNB ETN on 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.| FNB ETN vs. Europa Metals | FNB ETN vs. JSE Limited | FNB ETN vs. British American Tobacco | FNB ETN vs. Kap Industrial Holdings |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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