Correlation Between Ford and Trillium Gold

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

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

Diversification Opportunities for Ford and Trillium Gold

0.0

Correlation Coefficient

Ford  Trillium Gold

Pay attention - limited upside

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

Pair Corralation between Ford and Trillium Gold

If you would invest  1,073  in Ford Motor on September 30, 2024 and sell it today you would lose (70.00) from holding Ford Motor or give up 6.52% of portfolio value over 90 days.

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

Ford Motor  vs.  Trillium Gold Mines

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 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.

Trillium Gold Mines

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Trillium Gold Mines has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Trillium Gold is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Ford and Trillium Gold

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

The idea behind Ford Motor and Trillium Gold Mines 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.