Correlation Between Sypris Solutions and Ford
Can any of the company-specific risk be diversified away by investing in both Sypris Solutions 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 Sypris Solutions and Ford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sypris Solutions and Ford Motor, you can compare the effects of market volatilities on Sypris Solutions 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 Sypris Solutions with a short position of Ford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sypris Solutions and Ford.
Diversification Opportunities for Sypris Solutions and Ford
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sypris and Ford is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Sypris Solutions and Ford Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ford Motor and Sypris Solutions 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 Sypris Solutions 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 Sypris Solutions i.e., Sypris Solutions and Ford go up and down completely randomly.
Pair Corralation between Sypris Solutions and Ford
Given the investment horizon of 90 days Sypris Solutions is expected to generate 1.16 times more return on investment than Ford. However, Sypris Solutions is 1.16 times more volatile than Ford Motor. It trades about 0.22 of its potential returns per unit of risk. Ford Motor is currently generating about 0.12 per unit of risk. If you would invest 135.00 in Sypris Solutions on September 5, 2024 and sell it today you would earn a total of 15.00 from holding Sypris Solutions or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sypris Solutions vs. Ford Motor
Performance |
| Timeline |
| Sypris Solutions |
| Ford Motor |
Sypris Solutions and Ford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sypris Solutions and Ford
The main advantage of trading using opposite Sypris Solutions and Ford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sypris Solutions 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.| Sypris Solutions vs. Ford Motor | Sypris Solutions vs. General Motors | Sypris Solutions vs. Goodyear Tire Rubber | Sypris Solutions 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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