Correlation Between Ford and Hithink RoyalFlush

Can any of the company-specific risk be diversified away by investing in both Ford and Hithink RoyalFlush 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 Hithink RoyalFlush into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ford Motor and Hithink RoyalFlush Info, you can compare the effects of market volatilities on Ford and Hithink RoyalFlush 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 Hithink RoyalFlush. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Hithink RoyalFlush.

Diversification Opportunities for Ford and Hithink RoyalFlush

-0.15

Correlation Coefficient

Ford  Hithink RoyalFlush

Good diversification

The 3 months correlation between Ford and Hithink is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Hithink RoyalFlush Info in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hithink RoyalFlush Info 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 Hithink RoyalFlush. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hithink RoyalFlush Info has no effect on the direction of Ford i.e., Ford and Hithink RoyalFlush go up and down completely randomly.

Pair Corralation between Ford and Hithink RoyalFlush

Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.93 times more return on investment than Hithink RoyalFlush. However, Ford Motor is 1.07 times less risky than Hithink RoyalFlush. It trades about 0.14 of its potential returns per unit of risk. Hithink RoyalFlush Info is currently generating about -0.08 per unit of risk. If you would invest  929.00  in Ford Motor on December 29, 2024 and sell it today you would earn a total of  61.00  from holding Ford Motor or generate 6.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Ford Motor  vs.  Hithink RoyalFlush Info

Ford Motor

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ford Motor are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Ford is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Hithink RoyalFlush Info

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hithink RoyalFlush Info has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Hithink RoyalFlush is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ford and Hithink RoyalFlush

The main advantage of trading using opposite Ford and Hithink RoyalFlush positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Hithink RoyalFlush 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 Hithink RoyalFlush will offset losses from the drop in Hithink RoyalFlush's long position.

The idea behind Ford Motor and Hithink RoyalFlush Info 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.

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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.