Correlation Between Ford and New Source
Can any of the company-specific risk be diversified away by investing in both Ford and New Source 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 New Source into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and New Source Energy, you can compare the effects of market volatilities on Ford and New Source 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 New Source. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and New Source.
Diversification Opportunities for Ford and New Source
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ford and New is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and New Source Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Source Energy 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 New Source. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Source Energy has no effect on the direction of Ford i.e., Ford and New Source go up and down completely randomly.
Pair Corralation between Ford and New Source
If you would invest 0.01 in New Source Energy on November 3, 2024 and sell it today you would earn a total of 0.00 from holding New Source Energy or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 2.44% |
| Values | Daily Returns |
Ford Motor vs. New Source Energy
Performance |
| Timeline |
| Ford Motor |
| New Source Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ford and New Source Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and New Source
The main advantage of trading using opposite Ford and New Source positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, New Source 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 New Source will offset losses from the drop in New Source's long position.The idea behind Ford Motor and New Source Energy 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.| New Source vs. Calima Energy Limited | New Source vs. Barrister Energy LLC | New Source vs. Buru Energy Limited | New Source vs. Altura Energy |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |