Correlation Between Ford and NeoMedia Technologies
Can any of the company-specific risk be diversified away by investing in both Ford and NeoMedia Technologies 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 NeoMedia Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and NeoMedia Technologies, you can compare the effects of market volatilities on Ford and NeoMedia Technologies 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 NeoMedia Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and NeoMedia Technologies.
Diversification Opportunities for Ford and NeoMedia Technologies
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and NeoMedia is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and NeoMedia Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NeoMedia Technologies 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 NeoMedia Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NeoMedia Technologies has no effect on the direction of Ford i.e., Ford and NeoMedia Technologies go up and down completely randomly.
Pair Corralation between Ford and NeoMedia Technologies
If you would invest 990.00 in Ford Motor on October 23, 2024 and sell it today you would earn a total of 28.00 from holding Ford Motor or generate 2.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 5.56% |
| Values | Daily Returns |
Ford Motor vs. NeoMedia Technologies
Performance |
| Timeline |
| Ford Motor |
| NeoMedia Technologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ford and NeoMedia Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and NeoMedia Technologies
The main advantage of trading using opposite Ford and NeoMedia Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, NeoMedia Technologies 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 NeoMedia Technologies will offset losses from the drop in NeoMedia Technologies' long position.The idea behind Ford Motor and NeoMedia Technologies 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.| NeoMedia Technologies vs. AB International Group | NeoMedia Technologies vs. Peer To Peer | NeoMedia Technologies vs. AppYea Inc | NeoMedia Technologies vs. BASE Inc |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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