Correlation Between Ford and 59156RCC0
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By analyzing existing cross correlation between Ford Motor and MET 5 15 JUL 52, you can compare the effects of market volatilities on Ford and 59156RCC0 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 59156RCC0. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and 59156RCC0.
Diversification Opportunities for Ford and 59156RCC0
Very weak diversification
The 3 months correlation between Ford and 59156RCC0 is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and MET 5 15 JUL 52 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 59156RCC0 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 59156RCC0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 59156RCC0 has no effect on the direction of Ford i.e., Ford and 59156RCC0 go up and down completely randomly.
Pair Corralation between Ford and 59156RCC0
Taking into account the 90-day investment horizon Ford is expected to generate 6.29 times less return on investment than 59156RCC0. But when comparing it to its historical volatility, Ford Motor is 2.92 times less risky than 59156RCC0. It trades about 0.13 of its potential returns per unit of risk. MET 5 15 JUL 52 is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 8,934 in MET 5 15 JUL 52 on October 23, 2024 and sell it today you would earn a total of 1,787 from holding MET 5 15 JUL 52 or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Ford Motor vs. MET 5 15 JUL 52
Performance |
| Timeline |
| Ford Motor |
| 59156RCC0 |
Ford and 59156RCC0 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and 59156RCC0
The main advantage of trading using opposite Ford and 59156RCC0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, 59156RCC0 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 59156RCC0 will offset losses from the drop in 59156RCC0's long position.The idea behind Ford Motor and MET 5 15 JUL 52 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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