Correlation Between Ford and CONSOLIDATED
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By analyzing existing cross correlation between Ford Motor and CONSOLIDATED EDISON N, you can compare the effects of market volatilities on Ford and CONSOLIDATED 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 CONSOLIDATED. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and CONSOLIDATED.
Diversification Opportunities for Ford and CONSOLIDATED
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ford and CONSOLIDATED is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and CONSOLIDATED EDISON N in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONSOLIDATED EDISON 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 CONSOLIDATED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONSOLIDATED EDISON has no effect on the direction of Ford i.e., Ford and CONSOLIDATED go up and down completely randomly.
Pair Corralation between Ford and CONSOLIDATED
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the CONSOLIDATED. But the stock apears to be less risky and, when comparing its historical volatility, Ford Motor is 57.09 times less risky than CONSOLIDATED. The stock trades about 0.0 of its potential returns per unit of risk. The CONSOLIDATED EDISON N is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 8,482 in CONSOLIDATED EDISON N on November 29, 2024 and sell it today you would lose (26.00) from holding CONSOLIDATED EDISON N or give up 0.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 52.02% |
| Values | Daily Returns |
Ford Motor vs. CONSOLIDATED EDISON N
Performance |
| Timeline |
| Ford Motor |
| CONSOLIDATED EDISON |
Ford and CONSOLIDATED Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and CONSOLIDATED
The main advantage of trading using opposite Ford and CONSOLIDATED positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, CONSOLIDATED 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 CONSOLIDATED will offset losses from the drop in CONSOLIDATED's long position.The idea behind Ford Motor and CONSOLIDATED EDISON N 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.| CONSOLIDATED vs. Marti Technologies | CONSOLIDATED vs. Alto Neuroscience, | CONSOLIDATED vs. Sphere 3D Corp | CONSOLIDATED vs. Molecular Partners AG |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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