Correlation Between Ford and Saguaro Holdings
Can any of the company-specific risk be diversified away by investing in both Ford and Saguaro Holdings 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 Saguaro Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Saguaro Holdings Corp, you can compare the effects of market volatilities on Ford and Saguaro Holdings 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 Saguaro Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Saguaro Holdings.
Diversification Opportunities for Ford and Saguaro Holdings
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ford and Saguaro is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Saguaro Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saguaro Holdings 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 Saguaro Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saguaro Holdings Corp has no effect on the direction of Ford i.e., Ford and Saguaro Holdings go up and down completely randomly.
Pair Corralation between Ford and Saguaro Holdings
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.52 times more return on investment than Saguaro Holdings. However, Ford Motor is 1.94 times less risky than Saguaro Holdings. It trades about 0.01 of its potential returns per unit of risk. Saguaro Holdings Corp is currently generating about -0.04 per unit of risk. If you would invest 1,138 in Ford Motor on September 2, 2024 and sell it today you would lose (25.00) from holding Ford Motor or give up 2.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Ford Motor vs. Saguaro Holdings Corp
Performance |
| Timeline |
| Ford Motor |
| Saguaro Holdings Corp |
Ford and Saguaro Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Saguaro Holdings
The main advantage of trading using opposite Ford and Saguaro Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Saguaro Holdings 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 Saguaro Holdings will offset losses from the drop in Saguaro Holdings' long position.The idea behind Ford Motor and Saguaro Holdings 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.| Saguaro Holdings vs. Radcom | Saguaro Holdings vs. Brunswick | Saguaro Holdings vs. Academy Sports Outdoors | Saguaro Holdings vs. Marine Products |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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