Correlation Between Ford and 459200KM2
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By analyzing existing cross correlation between Ford Motor and IBM 22 09 FEB 27, you can compare the effects of market volatilities on Ford and 459200KM2 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 459200KM2. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and 459200KM2.
Diversification Opportunities for Ford and 459200KM2
Very good diversification
The 3 months correlation between Ford and 459200KM2 is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and IBM 22 09 FEB 27 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IBM 22 09 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 459200KM2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IBM 22 09 has no effect on the direction of Ford i.e., Ford and 459200KM2 go up and down completely randomly.
Pair Corralation between Ford and 459200KM2
Taking into account the 90-day investment horizon Ford Motor is expected to generate 2.81 times more return on investment than 459200KM2. However, Ford is 2.81 times more volatile than IBM 22 09 FEB 27. It trades about 0.03 of its potential returns per unit of risk. IBM 22 09 FEB 27 is currently generating about -0.35 per unit of risk. If you would invest 1,109 in Ford Motor on August 25, 2024 and sell it today you would earn a total of 9.00 from holding Ford Motor or generate 0.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 81.82% |
| Values | Daily Returns |
Ford Motor vs. IBM 22 09 FEB 27
Performance |
| Timeline |
| Ford Motor |
| IBM 22 09 |
Ford and 459200KM2 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and 459200KM2
The main advantage of trading using opposite Ford and 459200KM2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, 459200KM2 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 459200KM2 will offset losses from the drop in 459200KM2's long position.The idea behind Ford Motor and IBM 22 09 FEB 27 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.| 459200KM2 vs. AEP TEX INC | 459200KM2 vs. US BANK NATIONAL | 459200KM2 vs. 3M Company | 459200KM2 vs. Alcoa 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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