Correlation Between Ford and TENCNT
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By analyzing existing cross correlation between Ford Motor and TENCNT 324 03 JUN 50, you can compare the effects of market volatilities on Ford and TENCNT 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 TENCNT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and TENCNT.
Diversification Opportunities for Ford and TENCNT
Average diversification
The 3 months correlation between Ford and TENCNT is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and TENCNT 324 03 JUN 50 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TENCNT 324 03 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 TENCNT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TENCNT 324 03 has no effect on the direction of Ford i.e., Ford and TENCNT go up and down completely randomly.
Pair Corralation between Ford and TENCNT
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.87 times more return on investment than TENCNT. However, Ford Motor is 1.15 times less risky than TENCNT. It trades about 0.04 of its potential returns per unit of risk. TENCNT 324 03 JUN 50 is currently generating about -0.1 per unit of risk. If you would invest 1,122 in Ford Motor on August 28, 2024 and sell it today you would earn a total of 18.00 from holding Ford Motor or generate 1.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 52.38% |
| Values | Daily Returns |
Ford Motor vs. TENCNT 324 03 JUN 50
Performance |
| Timeline |
| Ford Motor |
| TENCNT 324 03 |
Ford and TENCNT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and TENCNT
The main advantage of trading using opposite Ford and TENCNT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, TENCNT 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 TENCNT will offset losses from the drop in TENCNT's long position.The idea behind Ford Motor and TENCNT 324 03 JUN 50 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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