Correlation Between Ford and KLONDIKE SILVER

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

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

Diversification Opportunities for Ford and KLONDIKE SILVER

0.14

Correlation Coefficient

Ford  KLONDIKE SILVER

Average diversification

The 3 months correlation between Ford and KLONDIKE is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and KLONDIKE SILVER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KLONDIKE SILVER 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 KLONDIKE SILVER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KLONDIKE SILVER has no effect on the direction of Ford i.e., Ford and KLONDIKE SILVER go up and down completely randomly.

Pair Corralation between Ford and KLONDIKE SILVER

If you would invest  1.50  in KLONDIKE SILVER on October 8, 2024 and sell it today you would earn a total of  0.00  from holding KLONDIKE SILVER or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	84.21%
Values	Daily Returns

Ford Motor  vs.  KLONDIKE SILVER

Ford Motor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ford Motor has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

KLONDIKE SILVER

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KLONDIKE SILVER has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Ford and KLONDIKE SILVER

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

The idea behind Ford Motor and KLONDIKE SILVER 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.