Correlation Between Ford and Infinite Acquisition
Can any of the company-specific risk be diversified away by investing in both Ford and Infinite Acquisition 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 Infinite Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Infinite Acquisition Corp, you can compare the effects of market volatilities on Ford and Infinite Acquisition 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 Infinite Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Infinite Acquisition.
Diversification Opportunities for Ford and Infinite Acquisition
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ford and Infinite is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Infinite Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infinite Acquisition Corp 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 Infinite Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infinite Acquisition Corp has no effect on the direction of Ford i.e., Ford and Infinite Acquisition go up and down completely randomly.
Pair Corralation between Ford and Infinite Acquisition
If you would invest 1,027 in Ford Motor on August 30, 2024 and sell it today you would earn a total of 83.00 from holding Ford Motor or generate 8.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
Ford Motor vs. Infinite Acquisition Corp
Performance |
| Timeline |
| Ford Motor |
| Infinite Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ford and Infinite Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Infinite Acquisition
The main advantage of trading using opposite Ford and Infinite Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Infinite Acquisition 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 Infinite Acquisition will offset losses from the drop in Infinite Acquisition's long position.The idea behind Ford Motor and Infinite Acquisition Corp 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.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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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