Correlation Between Ford and Simt Us
Can any of the company-specific risk be diversified away by investing in both Ford and Simt Us 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 Simt Us into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Simt Managed Volatility, you can compare the effects of market volatilities on Ford and Simt Us 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 Simt Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Simt Us.
Diversification Opportunities for Ford and Simt Us
Poor diversification
The 3 months correlation between Ford and Simt is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Simt Managed Volatility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Managed Volatility 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 Simt Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Managed Volatility has no effect on the direction of Ford i.e., Ford and Simt Us go up and down completely randomly.
Pair Corralation between Ford and Simt Us
Taking into account the 90-day investment horizon Ford Motor is expected to generate 2.54 times more return on investment than Simt Us. However, Ford is 2.54 times more volatile than Simt Managed Volatility. It trades about 0.01 of its potential returns per unit of risk. Simt Managed Volatility is currently generating about 0.01 per unit of risk. If you would invest 1,148 in Ford Motor on September 3, 2024 and sell it today you would lose (35.00) from holding Ford Motor or give up 3.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Simt Managed Volatility
Performance |
| Timeline |
| Ford Motor |
| Simt Managed Volatility |
Ford and Simt Us Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Simt Us
The main advantage of trading using opposite Ford and Simt Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Simt Us 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 Simt Us will offset losses from the drop in Simt Us' long position.| Ford vs. GreenPower Motor | Ford vs. ZEEKR Intelligent Technology | Ford vs. Volcon Inc | Ford vs. Ford Motor |
| Simt Us vs. Vanguard Value Index | Simt Us vs. Dodge Cox Stock | Simt Us vs. American Funds American | Simt Us vs. American Funds American |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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