Correlation Between Ford and Teuton Resources
Can any of the company-specific risk be diversified away by investing in both Ford and Teuton Resources 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 Teuton Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Teuton Resources Corp, you can compare the effects of market volatilities on Ford and Teuton Resources 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 Teuton Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Teuton Resources.
Diversification Opportunities for Ford and Teuton Resources
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and Teuton is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Teuton Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teuton Resources 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 Teuton Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teuton Resources Corp has no effect on the direction of Ford i.e., Ford and Teuton Resources go up and down completely randomly.
Pair Corralation between Ford and Teuton Resources
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.7 times more return on investment than Teuton Resources. However, Ford Motor is 1.42 times less risky than Teuton Resources. It trades about 0.04 of its potential returns per unit of risk. Teuton Resources Corp is currently generating about -0.55 per unit of risk. If you would invest 1,122 in Ford Motor on August 27, 2024 and sell it today you would earn a total of 18.00 from holding Ford Motor or generate 1.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Teuton Resources Corp
Performance |
| Timeline |
| Ford Motor |
| Teuton Resources Corp |
Ford and Teuton Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Teuton Resources
The main advantage of trading using opposite Ford and Teuton Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Teuton Resources 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 Teuton Resources will offset losses from the drop in Teuton Resources' long position.The idea behind Ford Motor and Teuton Resources 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.| Teuton Resources vs. Superior Plus Corp | Teuton Resources vs. NMI Holdings | Teuton Resources vs. Origin Agritech | Teuton Resources vs. SIVERS SEMICONDUCTORS AB |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Stocks Directory Find actively traded stocks across global markets |