Correlation Between Ford and Target Global
Can any of the company-specific risk be diversified away by investing in both Ford and Target Global 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 Target Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Target Global Acquisition, you can compare the effects of market volatilities on Ford and Target Global 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 Target Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Target Global.
Diversification Opportunities for Ford and Target Global
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and Target is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Target Global Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Target Global Acquisition 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 Target Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Target Global Acquisition has no effect on the direction of Ford i.e., Ford and Target Global go up and down completely randomly.
Pair Corralation between Ford and Target Global
Taking into account the 90-day investment horizon Ford Motor is expected to generate 3.61 times more return on investment than Target Global. However, Ford is 3.61 times more volatile than Target Global Acquisition. It trades about 0.01 of its potential returns per unit of risk. Target Global Acquisition is currently generating about 0.04 per unit of risk. If you would invest 1,132 in Ford Motor on August 26, 2024 and sell it today you would lose (14.00) from holding Ford Motor or give up 1.24% 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. Target Global Acquisition
Performance |
| Timeline |
| Ford Motor |
| Target Global Acquisition |
Ford and Target Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Target Global
The main advantage of trading using opposite Ford and Target Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Target Global 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 Target Global will offset losses from the drop in Target Global's long position.The idea behind Ford Motor and Target Global Acquisition 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.| Target Global vs. PowerUp Acquisition Corp | Target Global vs. Aurora Innovation | Target Global vs. HUMANA INC | Target Global 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |