Correlation Between Ford and Triumph Gold
Can any of the company-specific risk be diversified away by investing in both Ford and Triumph 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 Triumph 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 Triumph Gold Corp, you can compare the effects of market volatilities on Ford and Triumph 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 Triumph Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Triumph Gold.
Diversification Opportunities for Ford and Triumph Gold
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ford and Triumph is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Triumph Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triumph Gold 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 Triumph Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triumph Gold Corp has no effect on the direction of Ford i.e., Ford and Triumph Gold go up and down completely randomly.
Pair Corralation between Ford and Triumph Gold
Taking into account the 90-day investment horizon Ford is expected to generate 12.7 times less return on investment than Triumph Gold. But when comparing it to its historical volatility, Ford Motor is 3.42 times less risky than Triumph Gold. It trades about 0.01 of its potential returns per unit of risk. Triumph Gold Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 24.00 in Triumph Gold Corp on September 3, 2024 and sell it today you would lose (1.00) from holding Triumph Gold Corp or give up 4.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Ford Motor vs. Triumph Gold Corp
Performance |
| Timeline |
| Ford Motor |
| Triumph Gold Corp |
Ford and Triumph Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Triumph Gold
The main advantage of trading using opposite Ford and Triumph Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Triumph 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 Triumph Gold will offset losses from the drop in Triumph Gold's long position.| Ford vs. GreenPower Motor | Ford vs. ZEEKR Intelligent Technology | Ford vs. Volcon Inc | Ford vs. Ford Motor |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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