Correlation Between Ford and SOCGEN
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By analyzing existing cross correlation between Ford Motor and SOCGEN 4027 21 JAN 43, you can compare the effects of market volatilities on Ford and SOCGEN 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 SOCGEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and SOCGEN.
Diversification Opportunities for Ford and SOCGEN
Average diversification
The 3 months correlation between Ford and SOCGEN is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and SOCGEN 4027 21 JAN 43 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOCGEN 4027 21 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 SOCGEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOCGEN 4027 21 has no effect on the direction of Ford i.e., Ford and SOCGEN go up and down completely randomly.
Pair Corralation between Ford and SOCGEN
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the SOCGEN. In addition to that, Ford is 1.71 times more volatile than SOCGEN 4027 21 JAN 43. It trades about -0.01 of its total potential returns per unit of risk. SOCGEN 4027 21 JAN 43 is currently generating about 0.04 per unit of volatility. If you would invest 7,142 in SOCGEN 4027 21 JAN 43 on August 31, 2024 and sell it today you would earn a total of 155.00 from holding SOCGEN 4027 21 JAN 43 or generate 2.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 33.86% |
| Values | Daily Returns |
Ford Motor vs. SOCGEN 4027 21 JAN 43
Performance |
| Timeline |
| Ford Motor |
| SOCGEN 4027 21 |
Ford and SOCGEN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and SOCGEN
The main advantage of trading using opposite Ford and SOCGEN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, SOCGEN 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 SOCGEN will offset losses from the drop in SOCGEN's long position.The idea behind Ford Motor and SOCGEN 4027 21 JAN 43 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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