Correlation Between Ford and Landcadia Holdings

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

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

Diversification Opportunities for Ford and Landcadia Holdings

0.0

Correlation Coefficient

Ford  Landcadia Holdings

Pay attention - limited upside

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

Pair Corralation between Ford and Landcadia Holdings

Taking into account the 90-day investment horizon Ford is expected to generate 1.91 times less return on investment than Landcadia Holdings. In addition to that, Ford is 4.28 times more volatile than Landcadia Holdings II. It trades about 0.0 of its total potential returns per unit of risk. Landcadia Holdings II is currently generating about 0.03 per unit of volatility. If you would invest  999.00  in Landcadia Holdings II on October 7, 2024 and sell it today you would earn a total of  21.00  from holding Landcadia Holdings II or generate 2.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	26.21%
Values	Daily Returns

Ford Motor  vs.  Landcadia Holdings II

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.

Landcadia Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Landcadia Holdings II has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical indicators, Landcadia Holdings is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Ford and Landcadia Holdings

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

The idea behind Ford Motor and Landcadia Holdings II 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.