Correlation Between Ford and Selina Hospitality
Can any of the company-specific risk be diversified away by investing in both Ford and Selina Hospitality 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 Selina Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Selina Hospitality PLC, you can compare the effects of market volatilities on Ford and Selina Hospitality 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 Selina Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Selina Hospitality.
Diversification Opportunities for Ford and Selina Hospitality
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ford and Selina is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Selina Hospitality PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Selina Hospitality PLC 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 Selina Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Selina Hospitality PLC has no effect on the direction of Ford i.e., Ford and Selina Hospitality go up and down completely randomly.
Pair Corralation between Ford and Selina Hospitality
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Selina Hospitality. But the stock apears to be less risky and, when comparing its historical volatility, Ford Motor is 26.68 times less risky than Selina Hospitality. The stock trades about 0.0 of its potential returns per unit of risk. The Selina Hospitality PLC is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1.27 in Selina Hospitality PLC on September 3, 2024 and sell it today you would lose (0.27) from holding Selina Hospitality PLC or give up 21.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.8% |
| Values | Daily Returns |
Ford Motor vs. Selina Hospitality PLC
Performance |
| Timeline |
| Ford Motor |
| Selina Hospitality PLC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ford and Selina Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Selina Hospitality
The main advantage of trading using opposite Ford and Selina Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Selina Hospitality 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 Selina Hospitality will offset losses from the drop in Selina Hospitality's long position.| Ford vs. GreenPower Motor | Ford vs. ZEEKR Intelligent Technology | Ford vs. Volcon Inc | Ford vs. Ford Motor |
| Selina Hospitality vs. NetSol Technologies | Selina Hospitality vs. Procter Gamble | Selina Hospitality vs. Steven Madden | Selina Hospitality vs. RBC Bearings Incorporated |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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