Correlation Between Ford and Tianjin Songjiang
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By analyzing existing cross correlation between Ford Motor and Tianjin Songjiang Co, you can compare the effects of market volatilities on Ford and Tianjin Songjiang 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 Tianjin Songjiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Tianjin Songjiang.
Diversification Opportunities for Ford and Tianjin Songjiang
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ford and Tianjin is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Tianjin Songjiang Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianjin Songjiang 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 Tianjin Songjiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianjin Songjiang has no effect on the direction of Ford i.e., Ford and Tianjin Songjiang go up and down completely randomly.
Pair Corralation between Ford and Tianjin Songjiang
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.15 times more return on investment than Tianjin Songjiang. However, Ford Motor is 6.47 times less risky than Tianjin Songjiang. It trades about -0.15 of its potential returns per unit of risk. Tianjin Songjiang Co is currently generating about -0.11 per unit of risk. If you would invest 1,096 in Ford Motor on October 8, 2024 and sell it today you would lose (108.00) from holding Ford Motor or give up 9.85% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 97.56% |
Values | Daily Returns |
Ford Motor vs. Tianjin Songjiang Co
Performance |
Timeline |
Ford Motor |
Tianjin Songjiang |
Ford and Tianjin Songjiang Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ford and Tianjin Songjiang
The main advantage of trading using opposite Ford and Tianjin Songjiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Tianjin Songjiang 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 Tianjin Songjiang will offset losses from the drop in Tianjin Songjiang's long position.The idea behind Ford Motor and Tianjin Songjiang 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.Tianjin Songjiang vs. Hangzhou Guotai Environmental | Tianjin Songjiang vs. Shandong Iron and | Tianjin Songjiang vs. Shenzhen MYS Environmental | Tianjin Songjiang vs. Dazhong Transportation Group |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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