Correlation Between Ford and PostRock Energy
Can any of the company-specific risk be diversified away by investing in both Ford and PostRock Energy 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 PostRock Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and PostRock Energy Corp, you can compare the effects of market volatilities on Ford and PostRock Energy 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 PostRock Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and PostRock Energy.
Diversification Opportunities for Ford and PostRock Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ford and PostRock is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and PostRock Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PostRock Energy 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 PostRock Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PostRock Energy Corp has no effect on the direction of Ford i.e., Ford and PostRock Energy go up and down completely randomly.
Pair Corralation between Ford and PostRock Energy
If you would invest 1.00 in PostRock Energy Corp on September 19, 2024 and sell it today you would earn a total of 0.00 from holding PostRock Energy Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.79% |
| Values | Daily Returns |
Ford Motor vs. PostRock Energy Corp
Performance |
| Timeline |
| Ford Motor |
| PostRock Energy Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ford and PostRock Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and PostRock Energy
The main advantage of trading using opposite Ford and PostRock Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, PostRock Energy 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 PostRock Energy will offset losses from the drop in PostRock Energy's long position.The idea behind Ford Motor and PostRock Energy 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.| PostRock Energy vs. Xponential Fitness | PostRock Energy vs. Academy Sports Outdoors | PostRock Energy vs. Valneva SE ADR | PostRock Energy vs. Lipocine |
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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