Correlation Between Ford and Greenlight Biosciences

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

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

Diversification Opportunities for Ford and Greenlight Biosciences

0.0

Correlation Coefficient

Ford  Greenlight Biosciences

Pay attention - limited upside

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

Pair Corralation between Ford and Greenlight Biosciences

If you would invest  957.00  in Ford Motor on December 28, 2024 and sell it today you would earn a total of  33.00  from holding Ford Motor or generate 3.45% return on investment over 90 days.

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

Ford Motor  vs.  Greenlight Biosciences Holding

Ford Motor

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ford Motor are ranked lower than 2 (%) 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.

Greenlight Biosciences

Risk-Adjusted Performance

Very Weak

Over the last 90 days Greenlight Biosciences Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Greenlight Biosciences is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ford and Greenlight Biosciences

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

The idea behind Ford Motor and Greenlight Biosciences Holdings 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.

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.