Correlation Between Ford and Steward Funds
Can any of the company-specific risk be diversified away by investing in both Ford and Steward Funds 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 Steward Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Steward Funds , you can compare the effects of market volatilities on Ford and Steward Funds 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 Steward Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Steward Funds.
Diversification Opportunities for Ford and Steward Funds
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ford and Steward is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Steward Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steward Funds 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 Steward Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steward Funds has no effect on the direction of Ford i.e., Ford and Steward Funds go up and down completely randomly.
Pair Corralation between Ford and Steward Funds
Taking into account the 90-day investment horizon Ford is expected to generate 1.76 times less return on investment than Steward Funds. In addition to that, Ford is 2.07 times more volatile than Steward Funds . It trades about 0.01 of its total potential returns per unit of risk. Steward Funds is currently generating about 0.03 per unit of volatility. If you would invest 1,692 in Steward Funds on September 3, 2024 and sell it today you would earn a total of 275.00 from holding Steward Funds or generate 16.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Steward Funds
Performance |
| Timeline |
| Ford Motor |
| Steward Funds |
Ford and Steward Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Steward Funds
The main advantage of trading using opposite Ford and Steward Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Steward Funds 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 Steward Funds will offset losses from the drop in Steward Funds' long position.| Ford vs. GreenPower Motor | Ford vs. ZEEKR Intelligent Technology | Ford vs. Volcon Inc | Ford vs. Ford Motor |
| Steward Funds vs. The Hartford Midcap | Steward Funds vs. Mfs Emerging Markets | Steward Funds vs. Wells Fargo Special | Steward Funds vs. Washington Mutual Investors |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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