Correlation Between Ford and TTM Technologies
Can any of the company-specific risk be diversified away by investing in both Ford and TTM Technologies 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 TTM Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and TTM Technologies, you can compare the effects of market volatilities on Ford and TTM Technologies 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 TTM Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and TTM Technologies.
Diversification Opportunities for Ford and TTM Technologies
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ford and TTM is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and TTM Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TTM Technologies 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 TTM Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TTM Technologies has no effect on the direction of Ford i.e., Ford and TTM Technologies go up and down completely randomly.
Pair Corralation between Ford and TTM Technologies
Taking into account the 90-day investment horizon Ford is expected to generate 1.72 times less return on investment than TTM Technologies. But when comparing it to its historical volatility, Ford Motor is 1.09 times less risky than TTM Technologies. It trades about 0.18 of its potential returns per unit of risk. TTM Technologies is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 2,000 in TTM Technologies on September 4, 2024 and sell it today you would earn a total of 280.00 from holding TTM Technologies or generate 14.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ford Motor vs. TTM Technologies
Performance |
| Timeline |
| Ford Motor |
| TTM Technologies |
Ford and TTM Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and TTM Technologies
The main advantage of trading using opposite Ford and TTM Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, TTM Technologies 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 TTM Technologies will offset losses from the drop in TTM Technologies' long position.The idea behind Ford Motor and TTM Technologies 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.| TTM Technologies vs. EBRO FOODS | TTM Technologies vs. Cal Maine Foods | TTM Technologies vs. KB HOME | TTM Technologies vs. Tyson Foods |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |