Correlation Between Ford and Rekor Systems
Can any of the company-specific risk be diversified away by investing in both Ford and Rekor Systems 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 Rekor Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Rekor Systems, you can compare the effects of market volatilities on Ford and Rekor Systems 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 Rekor Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Rekor Systems.
Diversification Opportunities for Ford and Rekor Systems
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and Rekor is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Rekor Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rekor Systems 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 Rekor Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rekor Systems has no effect on the direction of Ford i.e., Ford and Rekor Systems go up and down completely randomly.
Pair Corralation between Ford and Rekor Systems
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.35 times more return on investment than Rekor Systems. However, Ford Motor is 2.82 times less risky than Rekor Systems. It trades about 0.17 of its potential returns per unit of risk. Rekor Systems is currently generating about -0.05 per unit of risk. If you would invest 1,033 in Ford Motor on August 31, 2024 and sell it today you would earn a total of 77.00 from holding Ford Motor or generate 7.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Rekor Systems
Performance |
| Timeline |
| Ford Motor |
| Rekor Systems |
Ford and Rekor Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Rekor Systems
The main advantage of trading using opposite Ford and Rekor Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Rekor Systems 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 Rekor Systems will offset losses from the drop in Rekor Systems' long position.The idea behind Ford Motor and Rekor Systems 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.| Rekor Systems vs. Aurora Mobile | Rekor Systems vs. Arqit Quantum | Rekor Systems vs. Bridgeline Digital | Rekor Systems vs. Repay Holdings Corp |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |