Correlation Between Ford and GENERAL
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By analyzing existing cross correlation between Ford Motor and GENERAL MTRS 5, you can compare the effects of market volatilities on Ford and GENERAL 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 GENERAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and GENERAL.
Diversification Opportunities for Ford and GENERAL
Very good diversification
The 3 months correlation between Ford and GENERAL is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and GENERAL MTRS 5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GENERAL MTRS 5 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 GENERAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GENERAL MTRS 5 has no effect on the direction of Ford i.e., Ford and GENERAL go up and down completely randomly.
Pair Corralation between Ford and GENERAL
Taking into account the 90-day investment horizon Ford Motor is expected to generate 2.43 times more return on investment than GENERAL. However, Ford is 2.43 times more volatile than GENERAL MTRS 5. It trades about 0.01 of its potential returns per unit of risk. GENERAL MTRS 5 is currently generating about 0.01 per unit of risk. If you would invest 1,138 in Ford Motor on September 2, 2024 and sell it today you would lose (25.00) from holding Ford Motor or give up 2.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Ford Motor vs. GENERAL MTRS 5
Performance |
| Timeline |
| Ford Motor |
| GENERAL MTRS 5 |
Ford and GENERAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and GENERAL
The main advantage of trading using opposite Ford and GENERAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, GENERAL 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 GENERAL will offset losses from the drop in GENERAL's long position.The idea behind Ford Motor and GENERAL MTRS 5 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.| GENERAL vs. Edgewell Personal Care | GENERAL vs. Rocky Brands | GENERAL vs. JD Sports Fashion | GENERAL vs. Saia Inc |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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