Correlation Between Ford and 629377CH3
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By analyzing existing cross correlation between Ford Motor and NRG Energy 525, you can compare the effects of market volatilities on Ford and 629377CH3 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 629377CH3. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and 629377CH3.
Diversification Opportunities for Ford and 629377CH3
Very good diversification
The 3 months correlation between Ford and 629377CH3 is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and NRG Energy 525 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NRG Energy 525 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 629377CH3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NRG Energy 525 has no effect on the direction of Ford i.e., Ford and 629377CH3 go up and down completely randomly.
Pair Corralation between Ford and 629377CH3
Taking into account the 90-day investment horizon Ford Motor is expected to generate 3.49 times more return on investment than 629377CH3. However, Ford is 3.49 times more volatile than NRG Energy 525. It trades about 0.03 of its potential returns per unit of risk. NRG Energy 525 is currently generating about -0.02 per unit of risk. If you would invest 1,011 in Ford Motor on September 2, 2024 and sell it today you would earn a total of 102.00 from holding Ford Motor or generate 10.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.37% |
| Values | Daily Returns |
Ford Motor vs. NRG Energy 525
Performance |
| Timeline |
| Ford Motor |
| NRG Energy 525 |
Ford and 629377CH3 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and 629377CH3
The main advantage of trading using opposite Ford and 629377CH3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, 629377CH3 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 629377CH3 will offset losses from the drop in 629377CH3's long position.The idea behind Ford Motor and NRG Energy 525 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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