Correlation Between Ford and WE Source
Can any of the company-specific risk be diversified away by investing in both Ford and WE Source 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 WE Source into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and WE Source Corp, you can compare the effects of market volatilities on Ford and WE Source 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 WE Source. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and WE Source.
Diversification Opportunities for Ford and WE Source
Pay attention - limited upside
The 3 months correlation between Ford and WESC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and WE Source Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WE Source Corp 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 WE Source. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WE Source Corp has no effect on the direction of Ford i.e., Ford and WE Source go up and down completely randomly.
Pair Corralation between Ford and WE Source
If you would invest 1,122 in Ford Motor on August 27, 2024 and sell it today you would lose (4.00) from holding Ford Motor or give up 0.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. WE Source Corp
Performance |
| Timeline |
| Ford Motor |
| WE Source Corp |
Ford and WE Source Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and WE Source
The main advantage of trading using opposite Ford and WE Source positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, WE Source 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 WE Source will offset losses from the drop in WE Source's long position.The idea behind Ford Motor and WE Source Corp 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.| WE Source vs. Yatra Online | WE Source vs. Mondee Holdings | WE Source vs. TripAdvisor | WE Source vs. Thayer Ventures Acquisition |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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