Correlation Between Ford and Global Star

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

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

Diversification Opportunities for Ford and Global Star

0.18

Correlation Coefficient

Ford  Global Star

Average diversification

The 3 months correlation between Ford and Global is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Global Star Acquisition, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Star Acquisition, 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 Global Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Star Acquisition, has no effect on the direction of Ford i.e., Ford and Global Star go up and down completely randomly.

Pair Corralation between Ford and Global Star

Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.17 times more return on investment than Global Star. However, Ford Motor is 5.85 times less risky than Global Star. It trades about 0.06 of its potential returns per unit of risk. Global Star Acquisition, is currently generating about -0.04 per unit of risk. If you would invest  943.00  in Ford Motor on December 19, 2024 and sell it today you would earn a total of  52.00  from holding Ford Motor or generate 5.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Ford Motor  vs.  Global Star Acquisition,

Ford Motor

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ford Motor are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating technical and fundamental indicators, Ford may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Global Star Acquisition,

Risk-Adjusted Performance

Very Weak

Over the last 90 days Global Star Acquisition, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Ford and Global Star

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

The idea behind Ford Motor and Global Star Acquisition, 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.