Correlation Between Ford and VN Index
Can any of the company-specific risk be diversified away by investing in both Ford and VN Index 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 VN Index into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and VN Index, you can compare the effects of market volatilities on Ford and VN Index 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 VN Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and VN Index.
Diversification Opportunities for Ford and VN Index
Pay attention - limited upside
The 3 months correlation between Ford and VNI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and VN Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VN Index 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 VN Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VN Index has no effect on the direction of Ford i.e., Ford and VN Index go up and down completely randomly.
Pair Corralation between Ford and VN Index
If you would invest 990.00 in Ford Motor on October 22, 2024 and sell it today you would earn a total of 28.00 from holding Ford Motor or generate 2.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 5.26% |
| Values | Daily Returns |
Ford Motor vs. VN Index
Performance |
| Timeline |
Ford and VN Index Volatility Contrast
Predicted Return Density |
| Returns |
Ford Motor
Pair trading matchups for Ford
VN Index
Pair trading matchups for VN Index
Pair Trading with Ford and VN Index
The main advantage of trading using opposite Ford and VN Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, VN Index 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 VN Index will offset losses from the drop in VN Index's long position.The idea behind Ford Motor and VN Index 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.| VN Index vs. POST TELECOMMU | VN Index vs. PetroVietnam Transportation Corp | VN Index vs. Elcom Technology Communications | VN Index vs. Transimex Transportation JSC |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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