Correlation Between Ford and Nasdaq CTA
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By analyzing existing cross correlation between Ford Motor and Nasdaq CTA Artificial, you can compare the effects of market volatilities on Ford and Nasdaq CTA 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 Nasdaq CTA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Nasdaq CTA.
Diversification Opportunities for Ford and Nasdaq CTA
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ford and Nasdaq is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Nasdaq CTA Artificial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq CTA Artificial 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 Nasdaq CTA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq CTA Artificial has no effect on the direction of Ford i.e., Ford and Nasdaq CTA go up and down completely randomly.
Pair Corralation between Ford and Nasdaq CTA
Taking into account the 90-day investment horizon Ford is expected to generate 2.51 times less return on investment than Nasdaq CTA. In addition to that, Ford is 1.94 times more volatile than Nasdaq CTA Artificial. It trades about 0.01 of its total potential returns per unit of risk. Nasdaq CTA Artificial is currently generating about 0.05 per unit of volatility. If you would invest 125,731 in Nasdaq CTA Artificial on September 19, 2024 and sell it today you would earn a total of 40,546 from holding Nasdaq CTA Artificial or generate 32.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.45% |
| Values | Daily Returns |
Ford Motor vs. Nasdaq CTA Artificial
Performance |
| Timeline |
Ford and Nasdaq CTA Volatility Contrast
Predicted Return Density |
| Returns |
Ford Motor
Pair trading matchups for Ford
Nasdaq CTA Artificial
Pair trading matchups for Nasdaq CTA
Pair Trading with Ford and Nasdaq CTA
The main advantage of trading using opposite Ford and Nasdaq CTA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Nasdaq CTA 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 Nasdaq CTA will offset losses from the drop in Nasdaq CTA's long position.The idea behind Ford Motor and Nasdaq CTA Artificial 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.| Nasdaq CTA vs. Global E Online | Nasdaq CTA vs. Addus HomeCare | Nasdaq CTA vs. Boston Omaha Corp | Nasdaq CTA vs. Hooker Furniture |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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