Correlation Between Ford and BANCO
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By analyzing existing cross correlation between Ford Motor and BANCO SANTANDER SA, you can compare the effects of market volatilities on Ford and BANCO 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 BANCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and BANCO.
Diversification Opportunities for Ford and BANCO
Good diversification
The 3 months correlation between Ford and BANCO is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and BANCO SANTANDER SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANCO SANTANDER SA 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 BANCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANCO SANTANDER SA has no effect on the direction of Ford i.e., Ford and BANCO go up and down completely randomly.
Pair Corralation between Ford and BANCO
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the BANCO. In addition to that, Ford is 2.05 times more volatile than BANCO SANTANDER SA. It trades about -0.18 of its total potential returns per unit of risk. BANCO SANTANDER SA is currently generating about -0.16 per unit of volatility. If you would invest 9,318 in BANCO SANTANDER SA on September 13, 2024 and sell it today you would lose (196.00) from holding BANCO SANTANDER SA or give up 2.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 77.27% |
| Values | Daily Returns |
Ford Motor vs. BANCO SANTANDER SA
Performance |
| Timeline |
| Ford Motor |
| BANCO SANTANDER SA |
Ford and BANCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and BANCO
The main advantage of trading using opposite Ford and BANCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, BANCO 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 BANCO will offset losses from the drop in BANCO's long position.The idea behind Ford Motor and BANCO SANTANDER SA 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.| BANCO vs. AEP TEX INC | BANCO vs. US BANK NATIONAL | BANCO vs. Recursion Pharmaceuticals | BANCO vs. SoundHound AI |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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