Correlation Between Ford and Timberland Bancorp
Can any of the company-specific risk be diversified away by investing in both Ford and Timberland Bancorp 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 Timberland Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Timberland Bancorp, you can compare the effects of market volatilities on Ford and Timberland Bancorp 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 Timberland Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Timberland Bancorp.
Diversification Opportunities for Ford and Timberland Bancorp
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ford and Timberland is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Timberland Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timberland Bancorp 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 Timberland Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timberland Bancorp has no effect on the direction of Ford i.e., Ford and Timberland Bancorp go up and down completely randomly.
Pair Corralation between Ford and Timberland Bancorp
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Timberland Bancorp. But the stock apears to be less risky and, when comparing its historical volatility, Ford Motor is 1.02 times less risky than Timberland Bancorp. The stock trades about -0.02 of its potential returns per unit of risk. The Timberland Bancorp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,517 in Timberland Bancorp on September 3, 2024 and sell it today you would earn a total of 722.00 from holding Timberland Bancorp or generate 28.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Timberland Bancorp
Performance |
| Timeline |
| Ford Motor |
| Timberland Bancorp |
Ford and Timberland Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Timberland Bancorp
The main advantage of trading using opposite Ford and Timberland Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Timberland Bancorp 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 Timberland Bancorp will offset losses from the drop in Timberland Bancorp's long position.| Ford vs. GreenPower Motor | Ford vs. ZEEKR Intelligent Technology | Ford vs. Volcon Inc | Ford vs. Ford Motor |
| Timberland Bancorp vs. First Financial Northwest | Timberland Bancorp vs. FVCBankcorp | Timberland Bancorp vs. Community West Bancshares | Timberland Bancorp vs. Sierra Bancorp |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |