Correlation Between HYZON Motors and Ford
Can any of the company-specific risk be diversified away by investing in both HYZON Motors and Ford 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 HYZON Motors and Ford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HYZON Motors and Ford Motor, you can compare the effects of market volatilities on HYZON Motors and Ford 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 HYZON Motors with a short position of Ford. Check out your portfolio center. Please also check ongoing floating volatility patterns of HYZON Motors and Ford.
Diversification Opportunities for HYZON Motors and Ford
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between HYZON and Ford is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding HYZON Motors and Ford Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ford Motor and HYZON Motors 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 HYZON Motors are associated (or correlated) with Ford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ford Motor has no effect on the direction of HYZON Motors i.e., HYZON Motors and Ford go up and down completely randomly.
Pair Corralation between HYZON Motors and Ford
Assuming the 90 days horizon HYZON Motors is expected to under-perform the Ford. In addition to that, HYZON Motors is 3.95 times more volatile than Ford Motor. It trades about -0.09 of its total potential returns per unit of risk. Ford Motor is currently generating about 0.23 per unit of volatility. If you would invest 1,015 in Ford Motor on September 1, 2024 and sell it today you would earn a total of 98.00 from holding Ford Motor or generate 9.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HYZON Motors vs. Ford Motor
Performance |
| Timeline |
| HYZON Motors |
| Ford Motor |
HYZON Motors and Ford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HYZON Motors and Ford
The main advantage of trading using opposite HYZON Motors and Ford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HYZON Motors position performs unexpectedly, Ford 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 Ford will offset losses from the drop in Ford's long position.| HYZON Motors vs. Ford Motor | HYZON Motors vs. General Motors | HYZON Motors vs. Goodyear Tire Rubber | HYZON Motors vs. Li Auto |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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