Correlation Between Ford and INTERNATIONAL
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By analyzing existing cross correlation between Ford Motor and INTERNATIONAL BUSINESS MACHS, you can compare the effects of market volatilities on Ford and INTERNATIONAL 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 INTERNATIONAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and INTERNATIONAL.
Diversification Opportunities for Ford and INTERNATIONAL
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ford and INTERNATIONAL is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and INTERNATIONAL BUSINESS MACHS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTERNATIONAL BUSINESS 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 INTERNATIONAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTERNATIONAL BUSINESS has no effect on the direction of Ford i.e., Ford and INTERNATIONAL go up and down completely randomly.
Pair Corralation between Ford and INTERNATIONAL
Taking into account the 90-day investment horizon Ford Motor is expected to generate 5.18 times more return on investment than INTERNATIONAL. However, Ford is 5.18 times more volatile than INTERNATIONAL BUSINESS MACHS. It trades about 0.0 of its potential returns per unit of risk. INTERNATIONAL BUSINESS MACHS is currently generating about 0.0 per unit of risk. If you would invest 1,047 in Ford Motor on December 1, 2024 and sell it today you would lose (92.00) from holding Ford Motor or give up 8.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.18% |
| Values | Daily Returns |
Ford Motor vs. INTERNATIONAL BUSINESS MACHS
Performance |
| Timeline |
| Ford Motor |
| INTERNATIONAL BUSINESS |
Ford and INTERNATIONAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and INTERNATIONAL
The main advantage of trading using opposite Ford and INTERNATIONAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, INTERNATIONAL 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 INTERNATIONAL will offset losses from the drop in INTERNATIONAL's long position.The idea behind Ford Motor and INTERNATIONAL BUSINESS MACHS 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.| INTERNATIONAL vs. Universal Technical Institute | INTERNATIONAL vs. Capital Clean Energy | INTERNATIONAL vs. Fidelity National Financial | INTERNATIONAL vs. Ultra Clean Holdings |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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