Correlation Between Ford and NUCOR
Specify exactly 2 symbols:
By analyzing existing cross correlation between Ford Motor and NUCOR P 395, you can compare the effects of market volatilities on Ford and NUCOR 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 NUCOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and NUCOR.
Diversification Opportunities for Ford and NUCOR
Very good diversification
The 3 months correlation between Ford and NUCOR is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and NUCOR P 395 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NUCOR P 5 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 NUCOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NUCOR P 5 has no effect on the direction of Ford i.e., Ford and NUCOR go up and down completely randomly.
Pair Corralation between Ford and NUCOR
Taking into account the 90-day investment horizon Ford Motor is expected to generate 4.4 times more return on investment than NUCOR. However, Ford is 4.4 times more volatile than NUCOR P 395. It trades about 0.17 of its potential returns per unit of risk. NUCOR P 395 is currently generating about -0.01 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. NUCOR P 395
Performance |
| Timeline |
| Ford Motor |
| NUCOR P 5 |
Ford and NUCOR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and NUCOR
The main advantage of trading using opposite Ford and NUCOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, NUCOR 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 NUCOR will offset losses from the drop in NUCOR's long position.The idea behind Ford Motor and NUCOR P 395 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |