Correlation Between Ford and Intech Us

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

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

Diversification Opportunities for Ford and Intech Us

-0.3

Correlation Coefficient

Ford  Intech Us

Very good diversification

The 3 months correlation between Ford and Intech is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Intech Managed Volatility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intech Managed Volatility 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 Intech Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intech Managed Volatility has no effect on the direction of Ford i.e., Ford and Intech Us go up and down completely randomly.

Pair Corralation between Ford and Intech Us

Taking into account the 90-day investment horizon Ford Motor is expected to generate 2.12 times more return on investment than Intech Us. However, Ford is 2.12 times more volatile than Intech Managed Volatility. It trades about 0.04 of its potential returns per unit of risk. Intech Managed Volatility is currently generating about -0.11 per unit of risk. If you would invest  970.00  in Ford Motor on December 24, 2024 and sell it today you would earn a total of  30.00  from holding Ford Motor or generate 3.09% return on investment over 90 days.

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

Ford Motor  vs.  Intech Managed Volatility

Ford Motor

Risk-Adjusted Performance

Insignificant

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.

Intech Managed Volatility

Risk-Adjusted Performance

Very Weak

Over the last 90 days Intech Managed Volatility has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Ford and Intech Us

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

The idea behind Ford Motor and Intech Managed Volatility 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.