Correlation Between Ford and New York
Can any of the company-specific risk be diversified away by investing in both Ford and New York 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 New York into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and New York Municipal, you can compare the effects of market volatilities on Ford and New York 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 New York. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and New York.
Diversification Opportunities for Ford and New York
Very good diversification
The 3 months correlation between Ford and New is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and New York Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New York Municipal 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 New York. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New York Municipal has no effect on the direction of Ford i.e., Ford and New York go up and down completely randomly.
Pair Corralation between Ford and New York
Taking into account the 90-day investment horizon Ford Motor is expected to generate 16.67 times more return on investment than New York. However, Ford is 16.67 times more volatile than New York Municipal. It trades about 0.01 of its potential returns per unit of risk. New York Municipal is currently generating about 0.11 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. New York Municipal
Performance |
| Timeline |
| Ford Motor |
| New York Municipal |
Ford and New York Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and New York
The main advantage of trading using opposite Ford and New York positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, New York 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 New York will offset losses from the drop in New York's long position.| Ford vs. GreenPower Motor | Ford vs. ZEEKR Intelligent Technology | Ford vs. Volcon Inc | Ford vs. Ford Motor |
| New York vs. New York Municipal | New York vs. Aim Taxexempt Funds | New York vs. Opnhmr Rchstr Ltd | New York vs. Aquagold International |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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