Correlation Between Ford and Thornburg Low
Can any of the company-specific risk be diversified away by investing in both Ford and Thornburg Low 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 Thornburg Low into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Thornburg Low Duration, you can compare the effects of market volatilities on Ford and Thornburg Low 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 Thornburg Low. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Thornburg Low.
Diversification Opportunities for Ford and Thornburg Low
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ford and Thornburg is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Thornburg Low Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg Low Duration 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 Thornburg Low. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thornburg Low Duration has no effect on the direction of Ford i.e., Ford and Thornburg Low go up and down completely randomly.
Pair Corralation between Ford and Thornburg Low
If you would invest 1,022 in Ford Motor on September 4, 2024 and sell it today you would earn a total of 76.00 from holding Ford Motor or generate 7.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Ford Motor vs. Thornburg Low Duration
Performance |
| Timeline |
| Ford Motor |
| Thornburg Low Duration |
Ford and Thornburg Low Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Thornburg Low
The main advantage of trading using opposite Ford and Thornburg Low positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Thornburg Low 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 Thornburg Low will offset losses from the drop in Thornburg Low's long position.The idea behind Ford Motor and Thornburg Low Duration 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.| Thornburg Low vs. Thornburg Value Fund | Thornburg Low vs. Thornburg Value Fund | Thornburg Low vs. Thornburg International Value | Thornburg Low vs. Thornburg International Value |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| 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 |