Correlation Between Ford and VectivBio Holding
Can any of the company-specific risk be diversified away by investing in both Ford and VectivBio Holding at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Ford and VectivBio Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and VectivBio Holding AG, you can compare the effects of market volatilities on Ford and VectivBio Holding 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 VectivBio Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and VectivBio Holding.
Diversification Opportunities for Ford and VectivBio Holding
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ford and VectivBio is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and VectivBio Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VectivBio Holding 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 VectivBio Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VectivBio Holding has no effect on the direction of Ford i.e., Ford and VectivBio Holding go up and down completely randomly.
Pair Corralation between Ford and VectivBio Holding
If you would invest 1,122 in Ford Motor on August 27, 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 | 4.76% |
| Values | Daily Returns |
Ford Motor vs. VectivBio Holding AG
Performance |
| Timeline |
| Ford Motor |
| VectivBio Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ford and VectivBio Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and VectivBio Holding
The main advantage of trading using opposite Ford and VectivBio Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, VectivBio Holding 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 VectivBio Holding will offset losses from the drop in VectivBio Holding's long position.The idea behind Ford Motor and VectivBio Holding AG 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.| VectivBio Holding vs. Cns Pharmaceuticals | VectivBio Holding vs. ZyVersa Therapeutics | VectivBio Holding vs. Immix Biopharma | VectivBio Holding vs. Hepion Pharmaceuticals |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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