Correlation Between Ford and 06406RAH0
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By analyzing existing cross correlation between Ford Motor and BANK NEW YORK, you can compare the effects of market volatilities on Ford and 06406RAH0 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 06406RAH0. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and 06406RAH0.
Diversification Opportunities for Ford and 06406RAH0
Very good diversification
The 3 months correlation between Ford and 06406RAH0 is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and BANK NEW YORK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK NEW YORK 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 06406RAH0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK NEW YORK has no effect on the direction of Ford i.e., Ford and 06406RAH0 go up and down completely randomly.
Pair Corralation between Ford and 06406RAH0
Taking into account the 90-day investment horizon Ford Motor is expected to generate 5.61 times more return on investment than 06406RAH0. However, Ford is 5.61 times more volatile than BANK NEW YORK. It trades about 0.01 of its potential returns per unit of risk. BANK NEW YORK is currently generating about 0.0 per unit of risk. If you would invest 1,094 in Ford Motor on August 29, 2024 and sell it today you would earn a total of 16.00 from holding Ford Motor or generate 1.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.49% |
| Values | Daily Returns |
Ford Motor vs. BANK NEW YORK
Performance |
| Timeline |
| Ford Motor |
| BANK NEW YORK |
Ford and 06406RAH0 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and 06406RAH0
The main advantage of trading using opposite Ford and 06406RAH0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, 06406RAH0 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 06406RAH0 will offset losses from the drop in 06406RAH0's long position.The idea behind Ford Motor and BANK NEW YORK 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.| 06406RAH0 vs. AEP TEX INC | 06406RAH0 vs. US BANK NATIONAL | 06406RAH0 vs. Eat Beyond Global | 06406RAH0 vs. Charles Schwab 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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