Correlation Between Ford and CHUBB
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By analyzing existing cross correlation between Ford Motor and CHUBB P 6, you can compare the effects of market volatilities on Ford and CHUBB 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 CHUBB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and CHUBB.
Diversification Opportunities for Ford and CHUBB
Very good diversification
The 3 months correlation between Ford and CHUBB is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and CHUBB P 6 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHUBB P 6 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 CHUBB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHUBB P 6 has no effect on the direction of Ford i.e., Ford and CHUBB go up and down completely randomly.
Pair Corralation between Ford and CHUBB
Taking into account the 90-day investment horizon Ford is expected to generate 431.28 times less return on investment than CHUBB. But when comparing it to its historical volatility, Ford Motor is 45.27 times less risky than CHUBB. It trades about 0.01 of its potential returns per unit of risk. CHUBB P 6 is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 10,957 in CHUBB P 6 on September 2, 2024 and sell it today you would earn a total of 331.00 from holding CHUBB P 6 or generate 3.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 74.8% |
| Values | Daily Returns |
Ford Motor vs. CHUBB P 6
Performance |
| Timeline |
| Ford Motor |
| CHUBB P 6 |
Ford and CHUBB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and CHUBB
The main advantage of trading using opposite Ford and CHUBB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, CHUBB 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 CHUBB will offset losses from the drop in CHUBB's long position.The idea behind Ford Motor and CHUBB P 6 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.| CHUBB vs. Perseus Mining Limited | CHUBB vs. Definitive Healthcare Corp | CHUBB vs. Mangazeya Mining | CHUBB vs. Zijin Mining Group |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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