Correlation Between Ford and Unique Fabricating
Can any of the company-specific risk be diversified away by investing in both Ford and Unique Fabricating 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 Unique Fabricating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Unique Fabricating, you can compare the effects of market volatilities on Ford and Unique Fabricating 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 Unique Fabricating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Unique Fabricating.
Diversification Opportunities for Ford and Unique Fabricating
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ford and Unique is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Unique Fabricating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unique Fabricating 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 Unique Fabricating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unique Fabricating has no effect on the direction of Ford i.e., Ford and Unique Fabricating go up and down completely randomly.
Pair Corralation between Ford and Unique Fabricating
If you would invest 1,022 in Ford Motor on September 5, 2024 and sell it today you would earn a total of 52.00 from holding Ford Motor or generate 5.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Ford Motor vs. Unique Fabricating
Performance |
| Timeline |
| Ford Motor |
| Unique Fabricating |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ford and Unique Fabricating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Unique Fabricating
The main advantage of trading using opposite Ford and Unique Fabricating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Unique Fabricating 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 Unique Fabricating will offset losses from the drop in Unique Fabricating's long position.The idea behind Ford Motor and Unique Fabricating 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.| Unique Fabricating vs. Aeva Technologies | Unique Fabricating vs. Innoviz Technologies | Unique Fabricating vs. Hesai Group American | Unique Fabricating vs. Luminar Technologies |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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