Correlation Between Ford and SuRo Capital
Can any of the company-specific risk be diversified away by investing in both Ford and SuRo Capital 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 SuRo Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and SuRo Capital Corp, you can compare the effects of market volatilities on Ford and SuRo Capital 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 SuRo Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and SuRo Capital.
Diversification Opportunities for Ford and SuRo Capital
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ford and SuRo is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and SuRo Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SuRo Capital 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 SuRo Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SuRo Capital Corp has no effect on the direction of Ford i.e., Ford and SuRo Capital go up and down completely randomly.
Pair Corralation between Ford and SuRo Capital
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the SuRo Capital. But the stock apears to be less risky and, when comparing its historical volatility, Ford Motor is 1.3 times less risky than SuRo Capital. The stock trades about 0.0 of its potential returns per unit of risk. The SuRo Capital Corp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 456.00 in SuRo Capital Corp on August 29, 2024 and sell it today you would earn a total of 42.00 from holding SuRo Capital Corp or generate 9.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. SuRo Capital Corp
Performance |
| Timeline |
| Ford Motor |
| SuRo Capital Corp |
Ford and SuRo Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and SuRo Capital
The main advantage of trading using opposite Ford and SuRo Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, SuRo Capital 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 SuRo Capital will offset losses from the drop in SuRo Capital's long position.The idea behind Ford Motor and SuRo Capital 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.| SuRo Capital vs. Aurora Innovation | SuRo Capital vs. HUMANA INC | SuRo Capital vs. Aquagold International | SuRo Capital vs. Barloworld Ltd ADR |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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