Correlation Between Ford and CITIC SECURITIES-H-
Can any of the company-specific risk be diversified away by investing in both Ford and CITIC SECURITIES-H- 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 CITIC SECURITIES-H- into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and CITIC SECURITIES H , you can compare the effects of market volatilities on Ford and CITIC SECURITIES-H- 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 CITIC SECURITIES-H-. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and CITIC SECURITIES-H-.
Diversification Opportunities for Ford and CITIC SECURITIES-H-
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and CITIC is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and CITIC SECURITIES H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC SECURITIES-H- 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 CITIC SECURITIES-H-. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIC SECURITIES-H- has no effect on the direction of Ford i.e., Ford and CITIC SECURITIES-H- go up and down completely randomly.
Pair Corralation between Ford and CITIC SECURITIES-H-
Taking into account the 90-day investment horizon Ford Motor is expected to generate 1.02 times more return on investment than CITIC SECURITIES-H-. However, Ford is 1.02 times more volatile than CITIC SECURITIES H . It trades about 0.06 of its potential returns per unit of risk. CITIC SECURITIES H is currently generating about 0.01 per unit of risk. If you would invest 938.00 in Ford Motor on December 18, 2024 and sell it today you would earn a total of 57.00 from holding Ford Motor or generate 6.08% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.33% |
Values | Daily Returns |
Ford Motor vs. CITIC SECURITIES H
Performance |
Timeline |
Ford Motor |
CITIC SECURITIES-H- |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Ford and CITIC SECURITIES-H- Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ford and CITIC SECURITIES-H-
The main advantage of trading using opposite Ford and CITIC SECURITIES-H- positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, CITIC SECURITIES-H- 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 CITIC SECURITIES-H- will offset losses from the drop in CITIC SECURITIES-H-'s long position.The idea behind Ford Motor and CITIC SECURITIES H 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.CITIC SECURITIES-H- vs. tokentus investment AG | CITIC SECURITIES-H- vs. MEDCAW INVESTMENTS LS 01 | CITIC SECURITIES-H- vs. Automatic Data Processing | CITIC SECURITIES-H- vs. DICKER DATA LTD |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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