Correlation Between Ford and Zura Bio
Can any of the company-specific risk be diversified away by investing in both Ford and Zura Bio 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 Zura Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Zura Bio Limited, you can compare the effects of market volatilities on Ford and Zura Bio 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 Zura Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Zura Bio.
Diversification Opportunities for Ford and Zura Bio
Very weak diversification
The 3 months correlation between Ford and Zura is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Zura Bio Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zura Bio Limited 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 Zura Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zura Bio Limited has no effect on the direction of Ford i.e., Ford and Zura Bio go up and down completely randomly.
Pair Corralation between Ford and Zura Bio
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.38 times more return on investment than Zura Bio. However, Ford Motor is 2.62 times less risky than Zura Bio. It trades about 0.08 of its potential returns per unit of risk. Zura Bio Limited is currently generating about -0.35 per unit of risk. If you would invest 990.00 in Ford Motor on November 1, 2024 and sell it today you would earn a total of 26.00 from holding Ford Motor or generate 2.63% 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. Zura Bio Limited
Performance |
| Timeline |
| Ford Motor |
| Zura Bio Limited |
Ford and Zura Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Zura Bio
The main advantage of trading using opposite Ford and Zura Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Zura Bio 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 Zura Bio will offset losses from the drop in Zura Bio's long position.The idea behind Ford Motor and Zura Bio Limited 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.| Zura Bio vs. Surrozen | Zura Bio vs. Armata Pharmaceuticals | Zura Bio vs. Pasithea Therapeutics Corp | Zura Bio vs. Aditxt Inc |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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