Correlation Between Ford and Stone Gold
Can any of the company-specific risk be diversified away by investing in both Ford and Stone Gold 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 Stone Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Stone Gold, you can compare the effects of market volatilities on Ford and Stone Gold 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 Stone Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Stone Gold.
Diversification Opportunities for Ford and Stone Gold
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ford and Stone is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Stone Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stone Gold 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 Stone Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stone Gold has no effect on the direction of Ford i.e., Ford and Stone Gold go up and down completely randomly.
Pair Corralation between Ford and Stone Gold
Taking into account the 90-day investment horizon Ford Motor is expected to generate 3.15 times more return on investment than Stone Gold. However, Ford is 3.15 times more volatile than Stone Gold. It trades about 0.0 of its potential returns per unit of risk. Stone Gold is currently generating about -0.09 per unit of risk. If you would invest 1,173 in Ford Motor on September 3, 2024 and sell it today you would lose (60.00) from holding Ford Motor or give up 5.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Ford Motor vs. Stone Gold
Performance |
| Timeline |
| Ford Motor |
| Stone Gold |
Ford and Stone Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Stone Gold
The main advantage of trading using opposite Ford and Stone Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Stone Gold 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 Stone Gold will offset losses from the drop in Stone Gold's long position.| Ford vs. GreenPower Motor | Ford vs. ZEEKR Intelligent Technology | Ford vs. Volcon Inc | Ford vs. Ford Motor |
| Stone Gold vs. Qubec Nickel Corp | Stone Gold vs. IGO Limited | Stone Gold vs. Avarone Metals | Stone Gold vs. Adriatic Metals PLC |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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