Correlation Between Ford and Burger King
Can any of the company-specific risk be diversified away by investing in both Ford and Burger King 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 Burger King into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Burger King Worldwide, you can compare the effects of market volatilities on Ford and Burger King 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 Burger King. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Burger King.
Diversification Opportunities for Ford and Burger King
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ford and Burger is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Burger King Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burger King Worldwide 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 Burger King. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burger King Worldwide has no effect on the direction of Ford i.e., Ford and Burger King go up and down completely randomly.
Pair Corralation between Ford and Burger King
If you would invest 988.00 in Ford Motor on September 24, 2024 and sell it today you would earn a total of 0.00 from holding Ford Motor or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Ford Motor vs. Burger King Worldwide
Performance |
Timeline |
Ford Motor |
Burger King Worldwide |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ford and Burger King Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ford and Burger King
The main advantage of trading using opposite Ford and Burger King positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Burger King 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 Burger King will offset losses from the drop in Burger King's long position.The idea behind Ford Motor and Burger King Worldwide 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.Burger King vs. Simon Property Group | Burger King vs. Barings BDC | Burger King vs. Pintec Technology Holdings | Burger King vs. Titan Machinery |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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