Correlation Between Ford and Widepoint
Can any of the company-specific risk be diversified away by investing in both Ford and Widepoint 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 Widepoint into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Widepoint C, you can compare the effects of market volatilities on Ford and Widepoint 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 Widepoint. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Widepoint.
Diversification Opportunities for Ford and Widepoint
Very weak diversification
The 3 months correlation between Ford and Widepoint is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Widepoint C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Widepoint C 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 Widepoint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Widepoint C has no effect on the direction of Ford i.e., Ford and Widepoint go up and down completely randomly.
Pair Corralation between Ford and Widepoint
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Widepoint. But the stock apears to be less risky and, when comparing its historical volatility, Ford Motor is 2.01 times less risky than Widepoint. The stock trades about 0.0 of its potential returns per unit of risk. The Widepoint C is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 262.00 in Widepoint C on August 24, 2024 and sell it today you would earn a total of 216.00 from holding Widepoint C or generate 82.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Widepoint C
Performance |
| Timeline |
| Ford Motor |
| Widepoint C |
Ford and Widepoint Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Widepoint
The main advantage of trading using opposite Ford and Widepoint positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Widepoint 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 Widepoint will offset losses from the drop in Widepoint's long position.The idea behind Ford Motor and Widepoint C 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.| Widepoint vs. Data Storage Corp | Widepoint vs. Usio Inc | Widepoint vs. ARB IOT Group | Widepoint vs. FiscalNote Holdings |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Stocks Directory Find actively traded stocks across global markets | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |