Correlation Between Ford and Patten Energy
Can any of the company-specific risk be diversified away by investing in both Ford and Patten 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 Patten 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 Patten Energy Solutions, you can compare the effects of market volatilities on Ford and Patten 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 Patten Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Patten Energy.
Diversification Opportunities for Ford and Patten Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ford and Patten is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Patten Energy Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Patten Energy Solutions 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 Patten Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Patten Energy Solutions has no effect on the direction of Ford i.e., Ford and Patten Energy go up and down completely randomly.
Pair Corralation between Ford and Patten Energy
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 | Flat |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Ford Motor vs. Patten Energy Solutions
Performance |
| Timeline |
| Ford Motor |
| Patten Energy Solutions |
Ford and Patten Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Patten Energy
The main advantage of trading using opposite Ford and Patten Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Patten 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 Patten Energy will offset losses from the drop in Patten Energy's long position.The idea behind Ford Motor and Patten Energy Solutions 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.| Patten Energy vs. Plyzer Technologies | Patten Energy vs. Electric Car | Patten Energy vs. Aquagold International | Patten Energy vs. Morningstar Unconstrained Allocation |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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