Correlation Between Ford and Super League
Can any of the company-specific risk be diversified away by investing in both Ford and Super League 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 Super League into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Super League Gaming, you can compare the effects of market volatilities on Ford and Super League 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 Super League. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Super League.
Diversification Opportunities for Ford and Super League
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and Super is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Super League Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Super League Gaming 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 Super League. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Super League Gaming has no effect on the direction of Ford i.e., Ford and Super League go up and down completely randomly.
Pair Corralation between Ford and Super League
Taking into account the 90-day investment horizon Ford is expected to generate 4.85 times less return on investment than Super League. But when comparing it to its historical volatility, Ford Motor is 3.5 times less risky than Super League. It trades about 0.01 of its potential returns per unit of risk. Super League Gaming is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 41.00 in Super League Gaming on August 31, 2024 and sell it today you would lose (6.00) from holding Super League Gaming or give up 14.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 28.45% |
| Values | Daily Returns |
Ford Motor vs. Super League Gaming
Performance |
| Timeline |
| Ford Motor |
| Super League Gaming |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ford and Super League Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Super League
The main advantage of trading using opposite Ford and Super League positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Super League 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 Super League will offset losses from the drop in Super League's long position.The idea behind Ford Motor and Super League Gaming 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.| Super League vs. Comscore | Super League vs. Arena Group Holdings | Super League vs. EverQuote Class A | Super League vs. Metalpha Technology Holding |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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