Correlation Between Ford and US Nuclear
Can any of the company-specific risk be diversified away by investing in both Ford and US Nuclear 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 US Nuclear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and US Nuclear Corp, you can compare the effects of market volatilities on Ford and US Nuclear 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 US Nuclear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and US Nuclear.
Diversification Opportunities for Ford and US Nuclear
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and UCLE is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and US Nuclear Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Nuclear 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 US Nuclear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Nuclear Corp has no effect on the direction of Ford i.e., Ford and US Nuclear go up and down completely randomly.
Pair Corralation between Ford and US Nuclear
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the US Nuclear. But the stock apears to be less risky and, when comparing its historical volatility, Ford Motor is 26.21 times less risky than US Nuclear. The stock trades about 0.0 of its potential returns per unit of risk. The US Nuclear Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 9.70 in US Nuclear Corp on January 8, 2025 and sell it today you would lose (4.50) from holding US Nuclear Corp or give up 46.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Ford Motor vs. US Nuclear Corp
Performance |
| Timeline |
| Ford Motor |
| US Nuclear Corp |
Ford and US Nuclear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and US Nuclear
The main advantage of trading using opposite Ford and US Nuclear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, US Nuclear 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 US Nuclear will offset losses from the drop in US Nuclear's long position.The idea behind Ford Motor and US Nuclear Corp 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.| US Nuclear vs. Sono Tek Corp | US Nuclear vs. Novanta | US Nuclear vs. ESCO Technologies | US Nuclear vs. Vontier Corp |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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