Correlation Between Ford and FIH MOBILE
Can any of the company-specific risk be diversified away by investing in both Ford and FIH MOBILE 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 FIH MOBILE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and FIH MOBILE, you can compare the effects of market volatilities on Ford and FIH MOBILE 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 FIH MOBILE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and FIH MOBILE.
Diversification Opportunities for Ford and FIH MOBILE
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ford and FIH is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and FIH MOBILE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIH MOBILE 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 FIH MOBILE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIH MOBILE has no effect on the direction of Ford i.e., Ford and FIH MOBILE go up and down completely randomly.
Pair Corralation between Ford and FIH MOBILE
Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.63 times more return on investment than FIH MOBILE. However, Ford Motor is 1.59 times less risky than FIH MOBILE. It trades about 0.06 of its potential returns per unit of risk. FIH MOBILE is currently generating about 0.02 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 54.00 from holding Ford Motor or generate 5.76% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Ford Motor vs. FIH MOBILE
Performance |
Timeline |
Ford Motor |
FIH MOBILE |
Ford and FIH MOBILE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ford and FIH MOBILE
The main advantage of trading using opposite Ford and FIH MOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, FIH MOBILE 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 FIH MOBILE will offset losses from the drop in FIH MOBILE's long position.The idea behind Ford Motor and FIH MOBILE 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.FIH MOBILE vs. Mount Gibson Iron | FIH MOBILE vs. Elmos Semiconductor SE | FIH MOBILE vs. ELMOS SEMICONDUCTOR | FIH MOBILE vs. TOREX SEMICONDUCTOR 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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |