Correlation Between Ford and Cymabay Therapeu

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

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

Diversification Opportunities for Ford and Cymabay Therapeu

0.0

Correlation Coefficient

Ford  Cymabay Therapeu

Pay attention - limited upside

The 3 months correlation between Ford and Cymabay is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Cymabay Therapeu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cymabay Therapeu 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 Cymabay Therapeu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cymabay Therapeu has no effect on the direction of Ford i.e., Ford and Cymabay Therapeu go up and down completely randomly.

Pair Corralation between Ford and Cymabay Therapeu

If you would invest  965.00  in Ford Motor on December 17, 2024 and sell it today you would earn a total of  8.00  from holding Ford Motor or generate 0.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Ford Motor  vs.  Cymabay Therapeu

Ford Motor

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ford Motor are ranked lower than 1 (%) 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 recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Cymabay Therapeu

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cymabay Therapeu has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Cymabay Therapeu is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ford and Cymabay Therapeu

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

The idea behind Ford Motor and Cymabay Therapeu 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.