Correlation Between Ford and MGMCHI
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By analyzing existing cross correlation between Ford Motor and MGMCHI 475 01 FEB 27, you can compare the effects of market volatilities on Ford and MGMCHI 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 MGMCHI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and MGMCHI.
Diversification Opportunities for Ford and MGMCHI
Good diversification
The 3 months correlation between Ford and MGMCHI is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and MGMCHI 475 01 FEB 27 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGMCHI 475 01 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 MGMCHI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MGMCHI 475 01 has no effect on the direction of Ford i.e., Ford and MGMCHI go up and down completely randomly.
Pair Corralation between Ford and MGMCHI
Taking into account the 90-day investment horizon Ford Motor is expected to generate 1.18 times more return on investment than MGMCHI. However, Ford is 1.18 times more volatile than MGMCHI 475 01 FEB 27. It trades about 0.17 of its potential returns per unit of risk. MGMCHI 475 01 FEB 27 is currently generating about -0.29 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 | 54.55% |
| Values | Daily Returns |
Ford Motor vs. MGMCHI 475 01 FEB 27
Performance |
| Timeline |
| Ford Motor |
| MGMCHI 475 01 |
Ford and MGMCHI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and MGMCHI
The main advantage of trading using opposite Ford and MGMCHI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, MGMCHI 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 MGMCHI will offset losses from the drop in MGMCHI's long position.The idea behind Ford Motor and MGMCHI 475 01 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.| MGMCHI vs. FitLife Brands, Common | MGMCHI vs. Bridgford Foods | MGMCHI vs. Nextnav Acquisition Corp | MGMCHI vs. Tyson Foods |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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