Correlation Between Ford and BitNine

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

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

Diversification Opportunities for Ford and BitNine

-0.05

Correlation Coefficient

Ford  BitNine

Good diversification

The 3 months correlation between Ford and BitNine is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and BitNine Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BitNine 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 BitNine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BitNine has no effect on the direction of Ford i.e., Ford and BitNine go up and down completely randomly.

Pair Corralation between Ford and BitNine

Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the BitNine. But the stock apears to be less risky and, when comparing its historical volatility, Ford Motor is 5.41 times less risky than BitNine. The stock trades about -0.08 of its potential returns per unit of risk. The BitNine Co is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  150,357  in BitNine Co on October 13, 2024 and sell it today you would earn a total of  92,143  from holding BitNine Co or generate 61.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Ford Motor  vs.  BitNine Co

Ford Motor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ford Motor has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

BitNine

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BitNine Co are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, BitNine sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ford and BitNine

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

The idea behind Ford Motor and BitNine Co 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.