Correlation Between Ford and KRAFT
Specify exactly 2 symbols:
By analyzing existing cross correlation between Ford Motor and KRAFT HEINZ FOODS, you can compare the effects of market volatilities on Ford and KRAFT 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 KRAFT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and KRAFT.
Diversification Opportunities for Ford and KRAFT
Very good diversification
The 3 months correlation between Ford and KRAFT is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and KRAFT HEINZ FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KRAFT HEINZ FOODS 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 KRAFT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KRAFT HEINZ FOODS has no effect on the direction of Ford i.e., Ford and KRAFT go up and down completely randomly.
Pair Corralation between Ford and KRAFT
Taking into account the 90-day investment horizon Ford Motor is expected to generate 3.36 times more return on investment than KRAFT. However, Ford is 3.36 times more volatile than KRAFT HEINZ FOODS. It trades about 0.17 of its potential returns per unit of risk. KRAFT HEINZ FOODS is currently generating about -0.19 per unit of risk. If you would invest 1,033 in Ford Motor on August 31, 2024 and sell it today you would earn a total of 77.00 from holding Ford Motor or generate 7.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. KRAFT HEINZ FOODS
Performance |
| Timeline |
| Ford Motor |
| KRAFT HEINZ FOODS |
Ford and KRAFT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and KRAFT
The main advantage of trading using opposite Ford and KRAFT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, KRAFT 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 KRAFT will offset losses from the drop in KRAFT's long position.The idea behind Ford Motor and KRAFT HEINZ FOODS 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.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.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |