Correlation Between Ford and 693304BC0
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By analyzing existing cross correlation between Ford Motor and EXC 285 15 SEP 51, you can compare the effects of market volatilities on Ford and 693304BC0 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 693304BC0. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and 693304BC0.
Diversification Opportunities for Ford and 693304BC0
Good diversification
The 3 months correlation between Ford and 693304BC0 is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and EXC 285 15 SEP 51 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EXC 285 15 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 693304BC0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EXC 285 15 has no effect on the direction of Ford i.e., Ford and 693304BC0 go up and down completely randomly.
Pair Corralation between Ford and 693304BC0
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.85 times more return on investment than 693304BC0. However, Ford Motor is 1.18 times less risky than 693304BC0. It trades about 0.25 of its potential returns per unit of risk. EXC 285 15 SEP 51 is currently generating about -0.22 per unit of risk. If you would invest 1,008 in Ford Motor on September 2, 2024 and sell it today you would earn a total of 105.00 from holding Ford Motor or generate 10.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 47.62% |
| Values | Daily Returns |
Ford Motor vs. EXC 285 15 SEP 51
Performance |
| Timeline |
| Ford Motor |
| EXC 285 15 |
Ford and 693304BC0 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and 693304BC0
The main advantage of trading using opposite Ford and 693304BC0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, 693304BC0 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 693304BC0 will offset losses from the drop in 693304BC0's long position.The idea behind Ford Motor and EXC 285 15 SEP 51 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.| 693304BC0 vs. ATT Inc | 693304BC0 vs. Home Depot | 693304BC0 vs. Cisco Systems | 693304BC0 vs. Dupont De Nemours |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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